On measuring vulnerability to poverty

There is a growing interest on dynamic and broader concepts of deprivation such as vulnerability, which takes in to account the destitution of individuals from future shocks. We use the framework of decision making under uncertainty to arrive at a new measure of vulnerability to poverty. We highlight the importance of current standard of living to better capture the notion of vulnerability. In conceptualizing the new class of measures of vulnerability, we thus move beyond the standard expected poverty measures that is commonly found in the literature. We also axiomatically characterize the new class of measure and discuss some of its properties.     

On defining at-risk status

You can include many in the at-risk group at the expense of including many not at-risk, or include few at the expense of missing many truly at-risk. The paper discusses the use of prevalence data and the relative costs of these two possibilities to help find the best way to separate at-risk and not-at-risk groups. The implications of the data being distributed normally are discussed, and several examples, including one with a nonnormal distribution, are given.     

On multidimensional indices of poverty

The contribution of recent “multidimensional indices of poverty” may not be as obvious as one thinks. There are two issues in assessing that contribution: whether one believes that a single index can ever be a sufficient statistic of poverty, and whether one aggregates in the space of “attainments,” using prices when appropriate, or “deprivations,” using weights set by the analyst. The paper argues that we should aim for a credible set of multiple indices rather than a single multidimensional index. Partial aggregation will still be necessary, but ideally the weights should be consistent with well-informed choices by poor people.     

On the links between globalization and poverty

This article surveys the evidence on the linkages between globalization and poverty, drawing on a new NBER study that has been completed under the direction of one of the authors. We focus on two measures of globalization: trade and international capital flows. Past researchers have argued that global economic integration should help the poor since poor countries have a comparative advantage in producing goods that use unskilled labor. Our first conclusion is that such a simple interpretation of general equilibrium trade models is misleading. Second, the evidence suggests that the poor are more likely to share in the gains from globalization when there are complementary policies in place.Third, trade and foreign investment reforms have produced benefits for the poor in exporting sectors and sectors that receive foreign investment. Fourth, financial crises are very costly to the poor. Finally, the collected evidence suggests that globalization produces both winners and losers among the poor. The fact that some poor individuals are made worse off by trade or financial integration underscores the need for carefully targeted safety nets. We conclude the article by identifying a number of unanswered research questions regarding the impact of globalization on poverty.     

The Individual Deprivation Measure: measuring poverty as if gender and inequality matter

As inequality deepens globally and within countries it is vital that we know how poverty shapes, constrains, and often destroys the lives of women and men. We know from decades of research that poverty is experienced differently by women and men, yet existing mainstream measures of poverty have been blind to gender. This article focuses on the Individual Deprivation Measure (IDM), a multi-dimensional measure of poverty and inequality designed to illuminate rather than obscure gender differences. Developed over the past five years by an inter-disciplinary research team based at the Australian National University, the IDM is grounded in research with women and men across 18 sites in six countries. Unlike most mainstream measures of poverty, the IDM takes the individual, rather than the household, as the unit of analysis. As a result, the IDM is able to capture gendered differences in the ways poverty is experienced, and also differences according to other markers of identity or social status, such as age, ethnicity, or geographic location.     

On the power of poverty orderings

This paper investigates the possibility of increasing the ordering power of additively separable poverty measures beyond the condition of second degree stochastic dominance by considering third degree stochastic dominance. For a fixed poverty line, the ordering power can be significantly enhanced by using the third degree criterion. For a range of poverty lines, the marginal power of the third degree criterion over the second degree depends critically upon the lower bound of the range; if the lower bound poverty line is arbitrarily close to zero, the two criteria coincide. The implications of a strong version of the transfer sensitivity axiom are also considered. Received: 20 November 1995/Accepted: 16 February 1998     

Poverty status probability: a new approach to measuring poverty and the progress of the poor

Poverty measurement and the analysis of the progress (or otherwise) of the poor, whether it is societies, families or individuals, is beset with difficulties and controversies surrounding the definition of a poverty line or frontier. Here, borrowing ideas from the mixture model literature, a new approach to assigning poverty-non poverty status is proposed which avoids specifying a frontier, the price is that an agent’s poverty status is only determined to the extent of its chance of being poor. Invoking variants of Gibrat’s law to give structure to the distribution of outcomes for homogeneous subgroups of a population within the context of a finite mixture model of societal outcomes facilitates calculation of an agent’s poverty status probability. From this it is straightforward to calculate all the usual poverty measures as well as other characteristics of the poor and non poor subgroups in a society. These ideas are exemplified in a study of 47 countries in Africa over the recent quarter century which reveals among other things a growing poverty rate and a growing disparity between poor and non poor groups not identified by conventional methods.     

On intertemporal poverty measures: the role of affluence and want

This paper proposes classes of intertemporal poverty measures which take into account both the debilitating impact of prolonged spells in poverty and the mitigating effect of periods of affluence on subsequent poverty. The weight assigned to the level of poverty in each time period depends on the length of the preceding spell of poverty or of non-poverty. The proposed classes of intertemporal poverty measures are quite general and allow for a range of possible judgements as to the overall impact on a poor period of preceding spells of poverty or affluence. We discuss the properties of the proposed classes of measures and axiomatically characterize these measures.     

Targeting and child poverty

We examine the relative merits of targeting children within the household through price subsidies and cash transfers. To do so, we model the behavior of a household composed of one adult and one child. We then show that ‘favorable’ distortions from price subsidies may allow redistributing toward the child and then derive the conditions under which this redistributive scheme is more efficient than cash transfers. The framework is extended to account for possible paternalistic preferences of the social planner and for households composed of two adults with different preferences. Applied to a continuum of households, our approach is extended to the problem of child poverty alleviation. In contrast to the traditional view, we show that well-chosen subsidies may be more cost effective than cash transfers in reducing child poverty.     

Rural poverty

Abstract

This paper examines rural poverty indicators arguing that governments have failed to provide the equitable access to resources needed to empower rural people to address their poverty. The paper illustrates how the decline in the fortunes of agriculture has led to a rapid disintegration of rural communities and to human rights concerns in relation to rural people. On quality of life indicators such as health and education, rural people are seriously disad-vantaged by comparison with urban Australians. Yet, the failure of governments to develop integrated rural policy frameworks that deliver equitable resources and their reliance on market forces is leading to the destruction of rural communities. For social workers, the challenge is to provide advocacy and policy leadership.     

On measuring deprivation adjusted for group disparities

This paper is concerned to present a procedure for `adjusting' a real-valued index of deprivation in such a way that the resulting measure is a summary statistic of both the average level of deprivation and the extent of inequality which obtains in its distribution. Received: 1 February 1999/Accepted: 9 October 2000     

Region-specific versus country-specific poverty lines in analysis of poverty

An analysis of poverty based on a country-specific income poverty line suffers from disregarding regional differences in prices and needs within a country and may, therefore, produce results that give a misleading picture of the extent of poverty as well as the geographic and demographic composition of the poor. To account for differences in prices and needs, this paper introduces an alternative method for identifying the poor based on a set of region-specific poverty lines. Applying Norwegian household register data for 2001 we find that the national level of poverty is only slightly affected by the change in definition of poverty line. However, the geographic as well as the demographic poverty profiles are shown to depend heavily on whether the method for identifying the poor relies on region- or country-specific thresholds. As expected, the results demonstrate that an analysis of poverty based on a country-specific threshold produces downward biased poverty rates in urban areas and upward biased poverty rates in rural areas. Moreover, when region-specific poverty thresholds form the basis of the poverty analysis, we find that the poverty rates among young singles and non-western immigrants are significantly higher than what is suggested by previous empirical evidence based on a joint country-specific poverty line.     

Population growth and poverty measurement

If the absolute number of poor people goes up, but the fraction of people in poverty comes down, has poverty gone up or gone down? The economist’s instinct, framed by population replication axioms that undergird standard measures of poverty, is to say that in this case poverty has gone down. But this goes against the instinct of those who work directly with the poor, for whom the absolute numbers notion makes more sense as they cope with more poor on the streets or in the soup kitchens. This paper attempts to put these two conceptions of poverty into a common framework. Specifically, it presents an axiomatic development of a family of poverty measures without a population replication axiom. This family has an intuitive link to standard measures, but it also allows one or other of “the absolute numbers” or the “fraction in poverty” conception to be given greater weight by the choice of relevant parameters. We hope that this family will prove useful in empirical and policy work, where it is important to give both views of poverty—the economist’s and the practitioner’s—their due.     

Intervention and representation of poverty

Any intervention against poverty is not so much an administrative process as a social relation between categories of actors that are partly defined by it. Being a social action, it implies a construction of meaning that will guide the behavior of the actors. This semantic network needs an interpretation. This article presents a simplified model (an "ideal-type") of this meaningful interaction. It will contrast the way the professional actors of the poverty field present poverty and poor people and the way poor people themselves present their situation and the difficulties they face. This comparison will show the great distance between these discourses.     

Child poverty and child outcomes

This article reviews the most up to date evidence on the prevalence of child poverty in Britain. It traces how child poverty has changed over the last 20 years, and how child poverty in Britain compares with that in other countries. Then there is a brief section describing the characteristics of poor children. It then reviews evidence of the impact of poverty on the well‐being of children drawing on the ESRC Children 5–16 programme project—Poverty: the Outcomes for Children (Bradshaw, 2001a). It concludes with a discussion of how the Labour Government is doing in its aspirations to abolish child poverty. Copyright © 2002 John Wiley & Sons, Ltd.     

Multidimensional poverty indices

This paper explores the axiomatic foundation of multidimensional poverty indices. Departing from the income approach which measures poverty by aggregating shortfalls of incomes from a pre-determined poverty-line income, a multidimensional index is a numerical representation of shortfalls of basic needs from some pre-specified minimum levels. The class of subgroup consistent poverty indices introduced by Foster and Shorrocks (1991) is generalized to the multidimensional context. New concepts necessary for the design of distribution-sensitive multidimensional poverty measures are introduced. Specific classes of subgroup consistent multidimensional poverty measures are derived based on sets of reasonable axioms. This paper also highlights the fact that domain restrictions may have a critical role in the design of multidimensional indices. Received: 1 March 1999/Accepted: 1 August 2000