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Poverty Indices and Policy Analysis

  • Myles, John
  • Picot, Garnett
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    Our aim in this paper is to show how recent developments in the theory and methods of poverty measurement can be applied to provide more accurate descriptions of poverty trends to the typical consumers of these statistics--policy analysts, policy-makers and their critics. Since Amartya Sen's (1976) classic critique of the "headcount" approach to poverty measurement, considerable progress has been made in constructing axiomatically-driven measures of "poverty intensity." These measures have had little influence outside the small world of experts who devised them largely because their mathematical representation has made their meaning obscure to potential users. We focus on the Sen-Shorrocks-Thon (SST) index and its elaboration by Osberg and Xu which provides the information contained in the index in a format that is easily accessible within traditional categories of poverty analysis. The SST index and its decomposition provide an analytical framework for discussing the underlying components of aggregate trends that allows for unambiguous answers to the usual policy-related questions concerning the components of change as well as their magnitude and direction. Copyright 2000 by The International Association for Research in Income and Wealth.

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    Article provided by International Association for Research in Income and Wealth in its journal Review of Income & Wealth.

    Volume (Year): 46 (2000)
    Issue (Month): 2 (June)
    Pages: 161-79

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    Handle: RePEc:bla:revinw:v:46:y:2000:i:2:p:161-79
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