A Proposal of a Synthetic Indicator to Measure Poverty Intensity, With an Application to EU-15 Countries
This paper deals with the proposal of a synthetic indicator to measure intensity of poverty. So, whereas incidence of poverty can be clearly measured using the headcount ratio indicator, according to Sen (1976) dimensions of poverty, the choice of a better intensity poverty measure is still an open question to resolve. Thus, in this paper, a new procedure to obtain a synthetic indicator from a set of well-performed poverty intensity indices as a start is proposed, using an adaptation of Principal Component Analysis (PCA). Conditions needed to make longitudinal comparisons possible are studied and properties of these synthetic indicators will also be analyzed, connected to TIP curves as well. As an illustration, this paper analyzes the evolution of poverty in the 15 countries of E.U., whose household income data are available through the information contained in the European Community Household Panel (ECPH). This analysis allows static and dynamic comparisons, related to the period from 1993 to 2000. Furthermore, the determination of groups of countries according to their characteristics in poverty will be accomplished.
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- Santiago Alvarez-Garcia & Juan Prieto-Rodriguez & Rafael Salas, 2003.
"The evolution of income inequality in the European Union,"
- Juan Prieto-Rodríguez & Rafael Salas & Santiago Álvarez-García, "undated". "The Evolution Of Income Inequality In The European Union," Working Papers 10-02 Classification-JEL , Instituto de Estudios Fiscales.
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