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A New Multiplicative Decomposition For The Foster-Greer-Thorbecke Poverty Indices

Author

Listed:
  • Oihana Aristondo

    (University of the Basque Country. Spain)

  • Casilda Lasso de la Vega

    (University of the Basque Country. Spain)

  • Ana Urrutia

    (University of the Basque Country. Spain)

Abstract

This paper identifies a multiplicative decomposition for the Foster-Greer-Thorbecke poverty indices as a product of the three components which should be involved in every poverty index: the incidence of poverty, measured by the headcount ratio, the intensity of poverty, measured by the aggregate income gap ratio and the inequality among the poor measured by an increasing transformation of the corresponding inequality index of the Generalized Entropy family. Then, taking data from the Spanish Household Budget Surveys (SHB) as a basis we show the advantages and possibilities of this framework in regard to completing and detailing information in studies of poverty over time.

Suggested Citation

  • Oihana Aristondo & Casilda Lasso de la Vega & Ana Urrutia, 2008. "A New Multiplicative Decomposition For The Foster-Greer-Thorbecke Poverty Indices," Working Papers 91, ECINEQ, Society for the Study of Economic Inequality.
    • Handle: RePEc:inq:inqwps:ecineq2008-91
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    References listed on IDEAS

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    1. Frank A. Cowell, 1980. "On the Structure of Additive Inequality Measures," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(3), pages 521-531.
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    6. Foster, James E & Shorrocks, Anthony F, 1991. "Subgroup Consistent Poverty Indices," Econometrica, Econometric Society, vol. 59(3), pages 687-709, May.
    7. Bourguignon, Francois, 1979. "Decomposable Income Inequality Measures," Econometrica, Econometric Society, vol. 47(4), pages 901-920, July.
    8. A.B. Atkinson & F. Bourguignon (ed.), 2000. "Handbook of Income Distribution," Handbook of Income Distribution, Elsevier, edition 1, volume 1, number 1.
    9. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-231, March.
    10. Lars Osberg & Kuan Xu, 2000. "International Comparisons of Poverty Intensity: Index Decomposition and Bootstrap Inference," Journal of Human Resources, University of Wisconsin Press, vol. 35(1), pages 51-81.
    11. Clark, Stephen & Hemming, Richard & Ulph, David, 1981. "On Indices for the Measurement of Poverty," Economic Journal, Royal Economic Society, vol. 91(362), pages 515-526, June.
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    Cited by:

    1. Suman Seth, Sabina Alkire, 2014. "Measuring and Decomposing Inequality among the Multidimensionally Poor Using Ordinal Data: A Counting Approach," OPHI Working Papers 68, Queen Elizabeth House, University of Oxford.
    2. Yang, Lin, 2017. "The relationship between poverty and inequality: concepts and measurement," LSE Research Online Documents on Economics 103491, London School of Economics and Political Science, LSE Library.
    3. Valérie Bérenger, 2017. "Using ordinal variables to measure multidimensional poverty in Egypt and Jordan," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 15(2), pages 143-173, June.
    4. Ottó Hajdu, 2021. "A New Generalized Variance Approach for Measuring Multidimensional Inequality and Poverty," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 158(3), pages 839-861, December.
    5. Croon, T.M. & Hoekstra, J.S.C.M. & Elsinga, M.G. & Dalla Longa, F. & Mulder, P., 2023. "Beyond headcount statistics: Exploring the utility of energy poverty gap indices in policy design," Energy Policy, Elsevier, vol. 177(C).
    6. Lin Yang, 2017. "The relationship between poverty and inequality: Concepts and measurement," CASE Papers /205, Centre for Analysis of Social Exclusion, LSE.
    7. Valérie Bérenger, 2017. "The counting approach to multidimensional poverty: The case of four African countries," WIDER Working Paper Series wp-2017-210, World Institute for Development Economic Research (UNU-WIDER).
    8. Francesco Burchi & Daniele Malerba & Claudio E. Montenegro & Nicole Rippin, 2022. "Assessing Trends in Multidimensional Poverty During the MDGs," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(S2), pages 317-346, December.
    9. Valérie Bérenger, 2017. "The counting approach to multidimensional poverty: The case of four African countries," WIDER Working Paper Series 210, World Institute for Development Economic Research (UNU-WIDER).
    10. Oihana Aristondo & Francisco J. Goerlich Gisbert & Casilda Lasso De La Vega, 2015. "A Proposal to Compare Consistently the Inequality Among the Poor," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 61(3), pages 561-572, September.
    11. Tomson Ogwang, 2022. "The Foster–Greer–Thorbecke Poverty Measures Reveal More," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 164(3), pages 1481-1503, December.
    12. Oihana Aristondo & José Luis García-Lapresta & Casilda Lasso de la Vega & Ricardo Alberto Marques Pereira, 2011. "The Gini index,the dual decomposition of aggregation functions, and the consistent measurement of inequality," Working Papers 203, ECINEQ, Society for the Study of Economic Inequality.
    13. Valérie Bérenger, 2017. "Using ordinal variables to measure multidimensional poverty in Egypt and Jordan," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 15(2), pages 143-173, June.
    14. Giuseppe Pignataro & Michele Costa, 2023. "The Foster-Greer-Thorbecke index and the inequality factors: an analysis through the Gini index decomposition," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 21(2), pages 483-497, June.

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    More about this item

    Keywords

    Poverty Measurement; Foster-Greer-Thorbecke poverty indices; Multiplicative Decomposition.;
    All these keywords.

    JEL classification:

    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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