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Does it Matter that we do not Agree on the Definition of Poverty? A Comparison of Four Approaches

  • Caterina Ruggeri Laderchi
  • Ruhi Saith
  • Frances Stewart

While there is world-wide agreement on poverty reduction as an overriding goal of development policy, there is little agreement on the definition of poverty. Four approaches to the definition and measurement of poverty are reviewed in this paper: the monetary, capability, social exclusion and participatory approaches. The theoretical underpinnings of the various measures and problems of operationalizing them are pointed out. It is argued that each is a construction of reality, involving numerous judgements, which are often not transparent. The different methods have different implications for policy, and also, to the extent that they point to different people as being poor, for targeting. Empirical work in Peru and India shows that there is significant lack of overlap between the methods with, for example, nearly half the population identified as in poverty according to monetary poverty but not in capability poverty, and conversely. This confirms similar findings elsewhere. Hence, the definition of poverty does matter for poverty eradication strategies.

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Article provided by Taylor & Francis Journals in its journal Oxford Development Studies.

Volume (Year): 31 (2003)
Issue (Month): 3 ()
Pages: 243-274

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Handle: RePEc:taf:oxdevs:v:31:y:2003:i:3:p:243-274
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  1. Datt, Gaurav & Ravallion, Martin, 1998. "Why Have Some Indian States Done Better Than Others at Reducing Rural Poverty?," Economica, London School of Economics and Political Science, vol. 65(257), pages 17-38, February.
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  6. Caterina Ruggeri Laderchi, 1997. "Poverty and its many dimensions: The role of income as an indicator," Oxford Development Studies, Taylor & Francis Journals, vol. 25(3), pages 345-360.
  7. Alkire, Sabina, 2002. "Valuing Freedoms: Sen's Capability Approach and Poverty Reduction," OUP Catalogue, Oxford University Press, number 9780199245796, March.
  8. Ravallion, M., 1998. "Poverty Lines in Theory and Practice," Papers 133, World Bank - Living Standards Measurement.
  9. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
  10. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-31, March.
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  13. Miguel Szekely & Nora Lustig & Martin Cumpa & Jose Antonio Mejia, 2004. "Do we know how much poverty there is?," Oxford Development Studies, Taylor & Francis Journals, vol. 32(4), pages 523-558.
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