A Meta-Theory for Absolute Poverty Lines

Absolute poverty lines aim to track a fixed poverty standard consistently. There are two main approaches for the construction of absolute poverty lines. The “welfaristic” approach tracks a fixed level of utility, and the “objective” approach tracks a fixed list of achievements. Longstanding debates between their respective proponents take place both at global and national levels. However, these debates only provide informal arguments about their respective theoretical merits. This paper proposes a meta-theory for the “consistency” properties of absolute poverty lines under heterogeneous prices and heterogeneous preferences. The results identify the sets of properties that fully characterize the poverty lines underpinned by these approaches. Which approach satisfies stronger versions of our properties depends on two aspects of the application for which poverty is monitored.