Decomposing Poverty Changes into Vertical and Horizontal Components
Variations in aggregate poverty indices can be due to differences in average poverty intensity, to changes in the welfare distances between those poor of initially unequal welfare status, and/or to emerging disparities in welfare among those poor of initially similar welfare status. This note uses a general cost-of-inequality approach that decomposes the total change in poverty into a sum of indices of each of these three components. This decomposition can serve inter alia to integrate horizontal and vertical equity criteria in the poverty alleviation assessment of social and economic programs. The use of these measures in briefly illustrated using Tunisian data.
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- Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
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"A Normative Approach to Measuring Classical Horizontal Inequity,"
97/3, Department of Economics, University of York.
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- Tuck, L. & Lindert, K., 1996. "From Universal Food Subsidies to a Self-Targeted Program: A Case Study in Tunisian Reform," World Bank - Discussion Papers 351, World Bank.
- Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
- Jenkins, Stephen P & Lambert, Peter J, 1997. "Three 'I's of Poverty Curves, with an Analysis of UK Poverty Trends," Oxford Economic Papers, Oxford University Press, vol. 49(3), pages 317-327, July. Full references (including those not matched with items on IDEAS)
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