Partially Identified Poverty Status: A New Approach to Measuring Poverty and the Progress of the Poor

Gordon Anderson, Maria Grazia Pittau and Roberto Zelli

Working Papers from University of Toronto, Department of Economics

Abstract: Poverty measurement and the analysis of the progress (or otherwise) of the poor is beset with difficulties and controversies surrounding the definition of a poverty line or frontier. Here, using ideas from the partial identification literature and mixture models, a new approach to poverty measurement is proposed which avoids specifying a frontier, the price is that an agent's poverty status is only partially identified. Invoking variants of Gibrat's law to give structure to the distribution of outcomes for homogeneous subgroups of a population within the context of a finite mixture model of societal outcomes facilitates calculation of the probability of an agent's poverty status. From this it is straightforward to calculate all the usual poverty measures as well as other characteristics of the poor and non poor subgroups in a society. These ideas are exemplified in a study of 47 countries in Africa over the recent quarter century which reveals among other things a growing poverty rate and a growing disparity between poor and non poor groups not identified by conventional methods.

Keywords: Poverty Frontiers; Mixture Models; Gibrat\'s law; Partial Identification (search for similar items in EconPapers)
JEL-codes: C14 I32 O1 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2011-01-20
New Economics Papers: this item is included in nep-ltv
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:tor:tecipa:tecipa-421

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