INCOME INEQUALITY AND POVERTY: SOME PROBLEMS

Dominique Thon

Review of Income and Wealth, 1981, vol. 27, issue 2, 207-210

Abstract: In an important recent book dealing with the measurement of income inequality with particular reference to poverty,1 Prof. N. Kakwani derives several poverty indices, investigates the effect of negative income tax schemes with the help of those indices and gives a numerical illustration based on Malaysian data. The aim of this note is to point out some logical flaws in his argument. Some of the ideas expressed in the part of his book we are concerned with have been disseminated for some time now2 and referred to in subsequent literature;3 yet their shortcomings do not seem to have attracted anyone's attention. The introductory section gives a concise presentation of the relevant part of Kakwani's contribution. The next two sections deal with some problems with his approach.

Date: 1981
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