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On the Definition and Measurement of Chronic Poverty

  • Rolf Aaberge

    ()

  • Magne Mogstad

As an alternative to the conventional methods for measuring chronic poverty, this paper proposes to use an interpersonal comparable measure of permanent income as a basis for defining and measuring chronic poverty. This approach accounts for the fact that individuals may undertake inter-period income transfers if it is to their advantage. Moreover, it allows for individual-specific interest rates on borrowing and saving as well as for the presence of liquidity constraints. Due to its general nature the proposed method proves useful for evaluating the theoretical basis of the standard methods for measuring chronic poverty.

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File URL: http://servizi.sme.unito.it/icer_repec/RePEc/icr/wp2006/ICERwp36-06.pdf
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Paper provided by ICER - International Centre for Economic Research in its series ICER Working Papers with number 36-2006.

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Length: 22 pages
Date of creation: Jul 2006
Date of revision:
Handle: RePEc:icr:wpicer:36-2006
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  8. Ann Huff Stevens, 1995. "Climbing Out of Poverty, Falling Back In: Measuring the Persistence of Poverty over Multiple Spells," NBER Working Papers 5390, National Bureau of Economic Research, Inc.
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  18. Davies, James B. & Shorrocks, Anthony F., 2000. "The distribution of wealth," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 11, pages 605-675 Elsevier.
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  24. Robert G. Valletta, 2006. "The Ins And Outs Of Poverty In Advanced Economies: Government Policy And Poverty Dynamics In Canada, Germany, Great Britain, And The United States," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 52(2), pages 261-284, 06.
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