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Poverty Measurement Under Income Risk / Armutsmessung bei Einkommensrisiken

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  • Weikard Hans-Peter

    (Department of Social Sciences, Wageningen University, Hollandseweg 1, NL-6706 KN Wageningen, Netherlands)

Abstract

Poverty indices are usually calculated on the basis of (cross section) income data from the past. As past income is fixed and future income is uncertain such measurement does not reflect the ex ante risk of falling into poverty. This paper presents refinements of commonly used poverty measures to account for income risk. It is shown that the standard headcount ratio underestimates poverty in societies with moderate poverty if income is risky. The Foster, Greer and Thorbecke measure always underestimates poverty if income risk is neglected.

Suggested Citation

  • Weikard Hans-Peter, 2004. "Poverty Measurement Under Income Risk / Armutsmessung bei Einkommensrisiken," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 224(3), pages 337-350, June.
    • Handle: RePEc:jns:jbstat:v:224:y:2004:i:3:p:337-350
    DOI: 10.1515/jbnst-2004-0304
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    References listed on IDEAS

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