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Why not consider that being absolutely poor is worse than being only relatively poor?

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  • Decerf, Benoit

Abstract

No current strategy to measure income poverty is able to (i) account for both its absolute and relative aspects and (ii) always consider that an individual who is absolutely poor is poorer than another individual who is only relatively poor. I propose a measure of income poverty satisfying (i) and (ii). Unlike alternative proposals satisfying (i), a decrease in a poor individual's income never reduces this measure. An application illustrates that the measure yields intuitive judgments about unequal growth experiences, for which all absolute (resp. relative) poverty measures systematically conclude that poverty has decreased (resp. increased).

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  • Decerf, Benoit, 2017. "Why not consider that being absolutely poor is worse than being only relatively poor?," Journal of Public Economics, Elsevier, vol. 152(C), pages 79-92.
    • Handle: RePEc:eee:pubeco:v:152:y:2017:i:c:p:79-92
    DOI: 10.1016/j.jpubeco.2017.06.003
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    References listed on IDEAS

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    1. Decerf, B., 2015. "A new index combining the absolute and relative aspects of income poverty: Theory and application," LIDAM Discussion Papers CORE 2015050, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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    11. Ravallion, Martin, 2008. "On the welfarist rationale for relative poverty lines," Policy Research Working Paper Series 4486, The World Bank.
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    13. Foster, James E, 1998. "Absolute versus Relative Poverty," American Economic Review, American Economic Association, vol. 88(2), pages 335-341, May.
    14. B. Decerf, 2017. "Conciliating Absolute and Relative Poverty: Income Poverty Measurement Beyond Sen’s Model," Working Papers 1701, University of Namur, Department of Economics.
    15. Jefferson, Philip N. (ed.), 2012. "The Oxford Handbook of the Economics of Poverty," OUP Catalogue, Oxford University Press, number 9780195393781.
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    Citations

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    Cited by:

    1. Decerf,Benoit Marie A & Ferrando,Mery & Quinn,Natalie N., 2021. "Global Income Poverty Measurement with Preference Heterogeneity : Theory and Application," Policy Research Working Paper Series 9844, The World Bank.
    2. Zhang, Yue-Jun & Liu, Jing-Yue & Woodward, Richard T., 2023. "Has Chinese Certified Emission Reduction trading reduced rural poverty in China?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 67(03), April.
    3. Li, Baoxi & Cheng, Shixiong & Xiao, De, 2020. "The impacts of environmental pollution and brain drain on income inequality," China Economic Review, Elsevier, vol. 62(C).
    4. Andrea Brandolini & John Micklewright, 2023. "Measuring global poverty," Chapters, in: Jacques Silber (ed.), Research Handbook on Measuring Poverty and Deprivation, chapter 6, pages 60-69, Edward Elgar Publishing.
    5. Paul Hufe & Ravi Kanbur & Andreas Peichlifo, 2022. "Measuring Unfair Inequality: Reconciling Equality of Opportunity and Freedom from Poverty," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 89(6), pages 3345-3380.
    6. Benoit Decerf, 2021. "Combining absolute and relative poverty: income poverty measurement with two poverty lines," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 56(2), pages 325-362, February.
    7. Goedemé, Tim & Decerf, Benoit & Van den Bosch, Karel, 2020. "A new poverty indicator for Europe: the extended headcount ratio," INET Oxford Working Papers 2020-26, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    8. Carla Krolage & Andreas Peichl & Daniel Waldenström, 2022. "Long-run trends in top income shares: The role of income and population growth," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 20(1), pages 97-118, March.
    9. Ravallion, Martin & Chen, Shaohua, 2019. "Global poverty measurement when relative income matters," Journal of Public Economics, Elsevier, vol. 177(C), pages 1-1.
    10. Benoit Decerf & Mery Ferrando, 2022. "Unambiguous Trends Combining Absolute and Relative Income Poverty: New Results and Global Application," The World Bank Economic Review, World Bank, vol. 36(3), pages 605-628.
    11. Benoit Decerf & Mery Ferrando, 2020. "Income Poverty has been Halved in the Developing World, even when Accounting for Relative Poverty," Working Papers 546, ECINEQ, Society for the Study of Economic Inequality.
    12. Ravallion,Martin & Chen,Shaohua, 2017. "Welfare-consistent global poverty measures," Policy Research Working Paper Series 8170, The World Bank.
    13. Decerf,Benoit Marie A, 2022. "Absolute and Relative Poverty Measurement : A Survey," Policy Research Working Paper Series 10008, The World Bank.

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    More about this item

    Keywords

    Income poverty measure; Relative poverty; Absolute poverty; Unequal growth;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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