Construction of An Adult Equivalence Index to Measure Intra-household Inequality and Poverty: Case Study

Sunil Kumar and Renuka Mahadevan

No 363, Discussion Papers Series from University of Queensland, School of Economics

Abstract: More often than not, poverty and inequality measures are based on consumption expenditures of households but this does not represent the welfare of the individuals within the household and hence concern has been raised on policy formulation (Haddad and Kanbur 1990). The strong assumption for such data use has been that resources within a household are divided according to need but a growing body of literature has argued that this is not true and that consumption inequality exists within households (Sen 1984, Thomas 1990, Phipps and Burton 1995, Iversen 2003). These studies have shown that certain social configurations such as discriminations or norms against women, the earning capacity of individuals and power structure within the households (traditionally assigned or acquired through earnings) are causes of inequality within the household. When deprivations within the household are not accounted for and if these are aggregated for the whole population, the underestimation of inequality and poverty could be significant and result in gross policy neglect.

Date: 2008
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