Notes on the measurement of poverty by the income method

The fact that different studies seeking to measure poverty in a given country often give differing results, although they apparently use the same method and the same data sources, has long disconcerted both experts in the field and the public in general. Such discrepancies (regarding the size of the phenomenon and the characteristics of households considered to be poor); reduce the credibility and technical reliability of these measurements, shed doubts on estimates of the level and evolution of poverty, and hinder international comparisons. This is why it is important to foster greater consensus among researchers regarding the criteria and procedures to be used, with a view to progressing towards a common pattern which will make the measurements more consistent and homogeneous and guarantee their effective comparability. This article outlines some aspects of the "income method" which affect the identification of poor households and the calculation of the extent of poverty and hence --since they could help to serve the above-mentioned purpose-- warrant special consideration in future studies on this subject. These aspects are: differences in the cost established for the basic food shopping basket; the procedures used to calculate the value of non-food items; the use of factors of equivalence for households of different sizes and compositions; evaluation of the reliability of measurements of current income; problems associated with expanding the coverage of the concept of income; poverty measurements, and, lastly, the sources of information normally used in studies of this type.