Normative Choices and Tradeoffs when Measuring Poverty over Time
This paper examines the aggregation of an indicator of wellbeing over time and across people to measure poverty. We characterise the general form of an intertemporal poverty measure under mild normative principles and show that it must embody an unambiguous ordering of possible trajectories of an individual’s wellbeing. We motivate further normative principles and examine their consequences for the form of the measure, showing that some measures suggested in the literature are not consistent with these principles. We discuss additional stronger properties that may be argued to be desirable for an intertemporal or chronic poverty measure. We identify compatibilities and tradeoffs among certain of these properties. For example, a poverty measure cannot simultaneously capture chronicity of poverty and sensitivity to fluctuations. We argue that a poverty analyst should choose among these properties according to context and the particular conception of poverty she seeks to measure.
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- Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-231, March.
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"Population Issues in Social Choice Theory, Welfare Economics, and Ethics,"
Cambridge University Press, number 9780521825511, December.
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- Daria Mendola & Annalisa Busetta & Anna Maria Milito, 2011. "Combining the intensity and sequencing of the poverty experience: a class of longitudinal poverty indices," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 174(4), pages 953-973, October.
- Catherine Porter & Natalie Na¨iri Quinn, 2008. "Intertemporal Poverty Measurement: Tradeoffs and Policy Options," CSAE Working Paper Series 2008-21, Centre for the Study of African Economies, University of Oxford.
- Mary Jo Bane & David T. Ellwood, 1986. "Slipping into and out of Poverty: The Dynamics of Spells," Journal of Human Resources, University of Wisconsin Press, vol. 21(1), pages 1-23.
- Jaffray, Jean-Yves, 1975. "Existence of a Continuous Utility Function: An Elementary Proof," Econometrica, Econometric Society, vol. 43(5-6), pages 981-983, Sept.-Nov.
- Joan R. Rodgers & John L. Rodgers, 1993. "Chronic Poverty in the United States," Journal of Human Resources, University of Wisconsin Press, vol. 28(1), pages 25-54.
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