IDEAS home Printed from https://ideas.repec.org/p/lvl/lacicr/0735.html
   My bibliography  Save this paper

Poverty and Inequality Components: a Micro Framework

Author

Listed:
  • Abdelkrim Araar
  • Jean-Yves Duclos

Abstract

This paper explores the link between poverty and inequality through an analysis of the poverty impact of changes in income-component inequality and in between -an within- group inequality. This can help shed light on the theoretical and empirical linkages between poverty, growth and inequality. It might also help design policies to improve both equity and welfare. The tools are illustrated using the recent 2004 Nigerian national household survey. The analytical derived linkages are supported by the empirical illustration, and interesting insights also emerge from the empirical analysis. One such insight is that both the sign and the size of the elasticities can be quite sensitive to the choice of measurement assumptions (such as the choice of inequality and poverty aversion parameters, and that of the poverty line). The elasticities are also very much distributive-sensitive and dependent on the type of inequality-changing processes taking place. This also suggests that the response of poverty to growth can also be expected to be significantly context specific.

Suggested Citation

  • Abdelkrim Araar & Jean-Yves Duclos, 2007. "Poverty and Inequality Components: a Micro Framework," Cahiers de recherche 0735, CIRPEE.
    • Handle: RePEc:lvl:lacicr:0735
    as

    Download full text from publisher

    File URL: http://www.cirpee.org/fileadmin/documents/Cahiers_2007/CIRPEE07-35.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hyun H. Son, 2006. "Assessing the pro-poorness of government fiscal policy in Thailand," Working Papers 15, International Policy Centre for Inclusive Growth.
    2. Dollar, David & Kraay, Aart, 2002. "Growth Is Good for the Poor," Journal of Economic Growth, Springer, vol. 7(3), pages 195-225, September.
    3. Pernia, Ernesto & Kakwani, Nanak, 2000. "What is Pro-poor Growth?," MPRA Paper 104987, University Library of Munich, Germany.
    4. Deininger, Klaus & Squire, Lyn, 1998. "New ways of looking at old issues: inequality and growth," Journal of Development Economics, Elsevier, vol. 57(2), pages 259-287.
    5. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    6. Frazer, Garth, 2006. "Inequality and development across and within countries," World Development, Elsevier, vol. 34(9), pages 1459-1481, September.
    7. Wolfson, Michael C, 1994. "When Inequalities Diverge," American Economic Review, American Economic Association, vol. 84(2), pages 353-358, May.
    8. Duclos, Jean-Yves & Echevin, Damien, 2005. "Bi-polarization comparisons," Economics Letters, Elsevier, vol. 87(2), pages 249-258, May.
    9. Heshmati, Almas, 2004. "The Relationship between Income Inequality, Poverty and Globalisation," IZA Discussion Papers 1277, Institute of Labor Economics (IZA).
    10. Makdissi, Paul & Wodon, Quentin, 2002. "Consumption dominance curves: testing for the impact of indirect tax reforms on poverty," Economics Letters, Elsevier, vol. 75(2), pages 227-235, April.
    11. Ravallion, Martin & Chen, Shaohua, 2003. "Measuring pro-poor growth," Economics Letters, Elsevier, vol. 78(1), pages 93-99, January.
    12. Yaari, Menahem E., 1988. "A controversial proposal concerning inequality measurement," Journal of Economic Theory, Elsevier, vol. 44(2), pages 381-397, April.
    13. Donaldson, David & Weymark, John A., 1980. "A single-parameter generalization of the Gini indices of inequality," Journal of Economic Theory, Elsevier, vol. 22(1), pages 67-86, February.
    14. Essama-Nssah, B., 2005. "A unified framework for pro-poor growth analysis," Economics Letters, Elsevier, vol. 89(2), pages 216-221, November.
    15. Abdelkrim Araar & Awoyemi Taiwo, 2006. "Poverty and Inequality Nexus: Illustrations with Nigerian Data," Economics Bulletin, AccessEcon, vol. 28(15), pages 1.
    16. repec:ebl:ecbull:v:28:y:2006:i:15:p:a0 is not listed on IDEAS
    17. Kakwani, Nanak, 1993. "Poverty and Economic Growth with Application to Cote d'Ivoire," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 39(2), pages 121-139, June.
    18. Abdelkrim Araar, 2006. "On the Decomposition of the Gini Coefficient: an Exact Approach, with an Illustration Using Cameroonian Data," Cahiers de recherche 0602, CIRPEE.
    19. Stephan Klasen, 2003. "In Search of The Holy Grail: How to Achieve Pro-Poor Growth ?," Ibero America Institute for Econ. Research (IAI) Discussion Papers 096, Ibero-America Institute for Economic Research.
    20. Jean-Yves Duclos & Abdelkrim Araar, 2006. "Poverty and Equity," Economic Studies in Inequality, Social Exclusion, and Well-Being, Springer, number 978-0-387-33318-2, Fall.
    21. Son, Hyun Hwa, 2004. "A note on pro-poor growth," Economics Letters, Elsevier, vol. 82(3), pages 307-314, March.
    22. Nanak Kakwani, 1993. "Poverty And Economic Growth With Application To Côte D'Ivoire," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 39(2), pages 121-139, June.
    23. Ravallion, Martin & Datt, Gaurav, 2002. "Why has economic growth been more pro-poor in some states of India than others?," Journal of Development Economics, Elsevier, vol. 68(2), pages 381-400, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ametoglo, Muriel Eyram Silo & Guo, Ping, 2016. "Inequality, poverty and inclusive growth in TOGO: An Assessment of the Survey Data," MPRA Paper 79705, University Library of Munich, Germany.
    2. Ramírez, Nerys F., 2013. "Determinantes de la Pobreza y Vulnerabilidad Social en República Dominicana. 2000-2012 [Determinants of Poverty and Social Vulnerability in the Dominican Republic. 2000-2012]," MPRA Paper 76996, University Library of Munich, Germany.
    3. Chirwa, Themba, 2022. "The Growth-Poverty-Inequality Nexus in Malawi: A recomputation," MPRA Paper 114486, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jean-Yves Duclos & Paul Makdissi & Abdelkrim Araar, 2009. "Pro-Poor Tax reforms, with an Application to Mexico," Working Papers 0907E, University of Ottawa, Department of Economics.
    2. Abdelkrim Araar & Jean‐Yves Duclos & Mathieu Audet & Paul Makdissi, 2009. "Testing For Pro‐Poorness Of Growth, With An Application To Mexico," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(4), pages 853-881, December.
    3. Jean-Yves Duclos & Paul Makdissi & Abdelkrim Araar, 2014. "Pro-poor indirect tax reforms, with an application to Mexico," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 21(1), pages 87-118, February.
    4. Jean-Yves Duclos, 2009. "What is “Pro-Poor”?," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 32(1), pages 37-58, January.
    5. B. Essama‐Nssah & Peter J. Lambert, 2009. "Measuring Pro‐Poorness: A Unifying Approach With New Results," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(3), pages 752-778, September.
    6. Klasen, Stephan, 2008. "Economic Growth and Poverty Reduction: Measurement Issues using Income and Non-Income Indicators," World Development, Elsevier, vol. 36(3), pages 420-445, March.
    7. Vincenzo Lombardo, 2011. "Growth and Inequality Effects on Poverty Reduction in Italy," Rivista italiana degli economisti, Società editrice il Mulino, issue 2, pages 241-280.
    8. Flaviana Palmisano & Vito Peragine, 2015. "The Distributional Incidence of Growth: A Social Welfare Approach," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 61(3), pages 440-464, September.
    9. Muhammad Khan & Muhammad Khan & Khalid Zaman & Umar Hassan & Sobia Umar, 2014. "Global estimates of growth–inequality–poverty (GIP) triangle: evidence from World Bank’s classification countries," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(5), pages 2631-2646, September.
    10. Zaman, Khalid & Khan, Muhammad Mushtaq & Ahmad, Mehboob, 2012. "The relationship between foreign direct investment and pro-poor growth policies in Pakistan: The new interface," Economic Modelling, Elsevier, vol. 29(4), pages 1220-1227.
    11. Takahiro Akita & Sachiko Miyata, 2020. "Assessing Pro-poorness of Regional Economic Growth: Evidence from Indonesia, 2004-2014," Working Papers EMS_2020_03, Research Institute, International University of Japan.
    12. Antonella Biscione & Dorothée Boccanfuso & Raul Caruso, 2020. "A Hypothesis on Poverty Change in Albania (2007-2016)," Rivista Internazionale di Scienze Sociali, Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore, vol. 128(3), pages 301-320.
    13. Ravallion, Martin, 2005. "Inequality is bad for the poor," Policy Research Working Paper Series 3677, The World Bank.
    14. Zaman, Khalid & Khilji, Bashir Ahmad, 2013. "The relationship between growth–inequality–poverty triangle and pro-poor growth policies in Pakistan: The twin disappointments," Economic Modelling, Elsevier, vol. 30(C), pages 375-393.
    15. Vanessa Hartmann & Konstantin M. Wacker, 2023. "Poverty decompositions with counterfactual income and inequality dynamics," Review of Development Economics, Wiley Blackwell, vol. 27(3), pages 1746-1768, August.
    16. Ali Hashemi, 2016. "Measuring Pro-Poor Growth in Egypt, Jordan, and Palestine," Working Papers 1008, Economic Research Forum, revised Jun 2016.
    17. Raul Caruso & Antonella Biscione, 2020. "Static and Dynamic Analysis of Poverty in Albania (2007-2016)," Working Papers 1007, European Centre of Peace Science, Integration and Cooperation (CESPIC), Catholic University 'Our Lady of Good Counsel'.
    18. Abdelkrim Araar, 2012. "Pro-poor Growth in Andean Countries," Cahiers de recherche 1225, CIRPEE.
    19. Ravallion, Martin, 2004. "Pro-poor growth : A primer," Policy Research Working Paper Series 3242, The World Bank.
    20. Jude Okechukwu Chukwu, 2017. "Estimating Inequality Semi-elasticity of Poverty Reduction in Nigeria," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 131(3), pages 1087-1101, April.

    More about this item

    Keywords

    Poverty; inequality; poverty elasticities; redistribution;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lvl:lacicr:0735. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Manuel Paradis (email available below). General contact details of provider: https://edirc.repec.org/data/cirpeca.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.