Integrating Mortality into Poverty Measurement through the Poverty Adjusted Life Expectancy Index

Jean-Marie Baland, Guilhem Cassan and Benoît Decerf ()

No 10133, Policy Research Working Paper Series from The World Bank

Abstract: Poverty measures typically do not account for mortality, resulting in counter-intuitive evaluations. The reason is that they (i) suffer from a mortality paradox and (ii) do not attribute intrinsic value to the lifespan. The paper proposes the first poverty index that always attributes a positive value to lifespan and does not suffer from the mortality paradox. This index, called the poverty-adjusted life expectancy, follows an expected lifecycle utility approach a la Harsanyi and is based on a single normative parameter that transparently captures the trade-off between poverty and mortality. This indicator can be straightforwardly generalized to account for unequal lifespans. Empirically, we show that accounting for mortality substantially changes cross-country comparisons and trends. The paper also quantifies the fraction of these comparisons that are robust to the choice of the normative parameter.

Date: 2022-07-29
New Economics Papers: this item is included in nep-dem, nep-dev and nep-hme
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