A New Multiplicative Decomposition For The Foster-Greer-Thorbecke Poverty Indices

Oihana Aristondo (), Casilda Lasso de la Vega () and Ana Urrutia ()
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Oihana Aristondo: University of the Basque Country. Spain
Casilda Lasso de la Vega: University of the Basque Country. Spain
Ana Urrutia: University of the Basque Country. Spain

No 91, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: This paper identifies a multiplicative decomposition for the Foster-Greer-Thorbecke poverty indices as a product of the three components which should be involved in every poverty index: the incidence of poverty, measured by the headcount ratio, the intensity of poverty, measured by the aggregate income gap ratio and the inequality among the poor measured by an increasing transformation of the corresponding inequality index of the Generalized Entropy family. Then, taking data from the Spanish Household Budget Surveys (SHB) as a basis we show the advantages and possibilities of this framework in regard to completing and detailing information in studies of poverty over time.

Keywords: Poverty Measurement; Foster-Greer-Thorbecke poverty indices; Multiplicative Decomposition. (search for similar items in EconPapers)
JEL-codes: I30 I32 D63 (search for similar items in EconPapers)
Date: 2008

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Persistent link: http://EconPapers.repec.org/RePEc:inq:inqwps:ecineq2008-91

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