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Pro-poor growth and the lognormal income distribution

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  • Peter J. Lambert

    () (University of Oregon)

Abstract

A widely accepted criterion for pro-poorness of an income growth pattern is that it should reduce a (chosen) measure of poverty by more than if all incomes were growing equiproportionately. Inequality reduction is not generally seen as either necessary or sufficient for pro-poorness. Because empirical income distributions fit well to the lognormal form, lognormality has sometimes been assumed in order to determine analytically the poverty effects of income growth. We show that in a lognormal world, growth is pro-poor in the above sense if and only if it is inequality-reducing. It follows that lognormality may not be a good paradigm by means of which to examine pro-poorness issues.

Suggested Citation

  • Peter J. Lambert, 2009. "Pro-poor growth and the lognormal income distribution," Working Papers 130, ECINEQ, Society for the Study of Economic Inequality.
  • Handle: RePEc:inq:inqwps:ecineq2009-130
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    File URL: http://www.ecineq.org/milano/WP/ECINEQ2009-130.pdf
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    Keywords

    poverty; growth; pro-poorness; lognormal distribution;

    JEL classification:

    • 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
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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