MEASURING RICHNESS AND POVERTY: A MICRO DATA APPLICATION TO EUROPE AND GERMANY

Andreas Peichl, Thilo Schaefer and Christoph Scheicher

Review of Income and Wealth, 2010, vol. 56, issue 3, 597-619

Abstract: In this paper, we define a new class of richness measures. In contrast to the often used headcount, these new measures are sensitive to changes in rich individuals' incomes and, therefore, allow for a more sophisticated analysis of richness. We demonstrate the application of these new measures in analyzing the development of poverty and richness over time in Germany. Moreover, we compare Germany to many other European countries and investigate the impact of tax reforms on poverty and richness. Using these examples, we show the importance of taking the intensity of changes into account and not only the number of people beyond a given richness line (headcount). We propose to use the new measures in addition to the headcount index for a more comprehensive analysis of richness.

Date: 2010
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https://doi.org/10.1111/j.1475-4991.2010.00404.x

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Working Paper: Measuring Richness and Poverty: A Micro Data Application to Europe and Germany (2008)
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