Pro-Poor Growth and the Lognormal Distribution

Peter J. Lambert ()
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Peter J. Lambert: University of Oregon

Journal of Income Distribution, 2010, vol. 19, issue 3-4, 88-99

Abstract: A widely accepted criterion for the pro-poorness of an income growth pattern is that it should reduce a (chosen) measure of poverty by more than if all incomes were growing equi-proportionately. Inequality reduction is not generally seen as either necessary or sufficient for pro-poorness. As empirical income distributions fit well to the lognormal form, lognormality has sometimes been assumed in order to determine analytically the poverty effects of income growth. We show that in a lognormal world, growth is pro-poor in the above sense, if and only if it is inequality-reducing. It follows that lognormality may not be a good paradigm by means of which to examine pro-poorness issues. In contrast, some popular 3-parameter forms offer the ability to conduct nuanced investigation of the pro-poorness growth-inequality nexus.

Keywords: poverty; growth; pro-poorness; lognormal distribution (search for similar items in EconPapers)
JEL-codes: D31 D63 I32 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (2)

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