Reference Groups and the Poverty Line: An Axiomatic Approach with an Empirical Illustration

Satya Chakravarty, Nachiketa Chattopadhyay, Joseph Deutsch, Zoya Nissanov and Jacques Silber

A chapter in Inequality after the 20th Century: Papers from the Sixth ECINEQ Meeting, 2016, vol. 24, pp 1-27 from Emerald Group Publishing Limited

Abstract: A recent trend in the study of poverty is to consider a relative poverty line, one that is responsive to the nature of the income distribution. We develop an axiomatic approach to the determination of an amalgam poverty line. Given a reference income (e.g., the mean or the median), the amalgam poverty line becomes a weighted average of the absolute poverty line and the reference income, where the weights depend on the policy maker’s preferences for aggregating the two components. The paper ends with an empirical illustration comparing urban and rural areas in the People’s Republic of China and India.

Keywords: Absolute poverty; amalgam threshold; India; People’s Republic of China; poverty line; relative poverty; D31; D63; I32 (search for similar items in EconPapers)
Date: 2016
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Related works:
Chapter: Reference Groups and the Poverty Line: An Axiomatic Approach with an Empirical Illustration (2019)
Working Paper: Reference groups and the poverty line: An axiomatic approach with an empirical illustration (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:eme:reinzz:s1049-258520160000024002

DOI: 10.1108/S1049-258520160000024002

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