Brazilian Poverty Between And Within Groups: Decomposition By Geographical, Group-Specific Poverty Lines

This study investigates Brazilian poverty by exploiting geographical differences in the cost of living and questions whether the standard approach in measuring poverty is informative enough when the population is heterogeneous. To do so, we apply the reformulation of the FGT class of poverty measures proposed by Chiappero and Civardi (2006). This decomposition aims to compute poverty within groups, using group-specific poverty lines, and poverty between groups by adopting a community-wide poverty line. The North and the Central-West reveal a dominance of the within component. The North-East shows the highest level of poverty, even higher than the North and the Central-West, but the high within group component is counterbalanced by a higher between group component, attributable to the high level of inequality of the North-East. The South and the South-East have between group components that dominate over within group ones. Our findings suggest that the analysis of poverty between and within groups is more exhaustive than the standard methodology when differentiated poverty lines are exploited.