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On the Definition and Measurement of Chronic Poverty

Rolf Aaberge () and Magne Mogstad ()

ICER Working Papers from ICER - International Centre for Economic Research

Abstract: As an alternative to the conventional methods for measuring chronic poverty, this paper proposes to use an interpersonal comparable measure of permanent income as a basis for defining and measuring chronic poverty. This approach accounts for the fact that individuals may undertake inter-period income transfers if it is to their advantage. Moreover, it allows for individual-specific interest rates on borrowing and saving as well as for the presence of liquidity constraints. Due to its general nature the proposed method proves useful for evaluating the theoretical basis of the standard methods for measuring chronic poverty.

Keywords: Intertemporal choice; liquidity constraints; permanent income; chronic poverty. (search for similar items in EconPapers)
JEL-codes: D71 D91 I32 (search for similar items in EconPapers)
Date: 2006-07
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Working Paper: On the Definition and Measurement of Chronic Poverty (2007) Downloads
Working Paper: On the Definition and Measurement of Chronic Poverty (2007) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:icr:wpicer:36-2006

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