DEFINING POVERTY LINES AS A FRACTION OF CENTRAL TENDENCY

Christophe Muller

Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: We show under lognormality that, when the Gini coefficient is stable over time, defining the poverty line as a fraction of a central tendency of the living standard distribution restricts the evolution of the poverty measures to be stable. That is, poverty does not change if the Gini coefficient does not change. Moreover, when the Gini coefficient slightly changes, most of the poverty change can be considered a change in inequality. Then, the consequences of using different poverty lines are analysed. Thus, important features in studies of poverty change based on these lines may result from methodological choices rather than from economic mechanisms.

Keywords: Measurement and Analysis of Poverty; Income Distribution; Personal Income Distribution (search for similar items in EconPapers)
JEL-codes: D31 I32 O15 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2005-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasad:2005-13

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