Income Distribution Dependence of Poverty Measure: A Theoretical Analysis

Amit K Chattopadhyay and Sushanta Mallick ()

Papers from arXiv.org

Abstract: With a new deprivation (or poverty) function, in this paper, we theoretically study the changes in poverty with respect to the `global' mean and variance of the income distribution using Indian survey data. We show that when the income obeys a log-normal distribution, a rising mean income generally indicates a reduction in poverty while an increase in the variance of the income distribution increases poverty. This altruistic view for a developing economy, however, is not tenable anymore once the poverty index is found to follow a pareto distribution. Here although a rising mean income indicates a reduction in poverty, due to the presence of an inflexion point in the poverty function, there is a critical value of the variance below which poverty decreases with increasing variance while beyond this value, poverty undergoes a steep increase followed by a decrease with respect to higher variance. Following these results, we make quantitative predictions to correlate a developing with a developed economy.

Date: 2005-07
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in "Income distribution dependence of poverty measure: A theoretical analysis" in Physica A, 377, 241-252 (2007)

Downloads: (external link)
http://arxiv.org/pdf/physics/0507035 Latest version (application/pdf)

Related works:
Journal Article: Income distribution dependence of poverty measure: A theoretical analysis (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:physics/0507035

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().