IDEAS home Printed from https://ideas.repec.org/a/jns/jbstat/v224y2004i3p337-350.html
   My bibliography  Save this article

Poverty Measurement Under Income Risk / Armutsmessung bei Einkommensrisiken

Author

Listed:
  • Weikard Hans-Peter

    (Department of Social Sciences, Wageningen University, Hollandseweg 1, NL-6706 KN Wageningen, Netherlands)

Abstract

Poverty indices are usually calculated on the basis of (cross section) income data from the past. As past income is fixed and future income is uncertain such measurement does not reflect the ex ante risk of falling into poverty. This paper presents refinements of commonly used poverty measures to account for income risk. It is shown that the standard headcount ratio underestimates poverty in societies with moderate poverty if income is risky. The Foster, Greer and Thorbecke measure always underestimates poverty if income risk is neglected.

Suggested Citation

  • Weikard Hans-Peter, 2004. "Poverty Measurement Under Income Risk / Armutsmessung bei Einkommensrisiken," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 224(3), pages 337-350, June.
    • Handle: RePEc:jns:jbstat:v:224:y:2004:i:3:p:337-350
    DOI: 10.1515/jbnst-2004-0304
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/jbnst-2004-0304
    Download Restriction: no
    File URL: https://libkey.io/10.1515/jbnst-2004-0304?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Buhong Zheng, 1997. "Aggregate Poverty Measures," Journal of Economic Surveys, Wiley Blackwell, vol. 11(2), pages 123-162, June.
    2. Robert H. Haveman & Barbara L. Wolfe, 1985. "Income, Inequality, and Uncertainty: Differences between the Disabled and Nondisabled," NBER Chapters, in: Horizontal Equity, Uncertainty, and Economic Well-Being, pages 293-322, National Bureau of Economic Research, Inc.
    3. P. Jenkins, Stephen & Gardiner, Karen & Burgess, Simon & Propper, Carol, 2000. "Measuring income risk," ISER Working Paper Series 2000-15, Institute for Social and Economic Research.
    4. Mary Jo Bane & David T. Ellwood, 1986. "Slipping into and out of Poverty: The Dynamics of Spells," Journal of Human Resources, University of Wisconsin Press, vol. 21(1), pages 1-23.
    5. Ravallion, Martin, 1988. "Expected Poverty under Risk-Induced Welfare Variability," Economic Journal, Royal Economic Society, vol. 98(393), pages 1171-1182, December.
    6. Ann Huff Stevens, 1999. "Climbing out of Poverty, Falling Back in: Measuring the Persistence of Poverty Over Multiple Spells," Journal of Human Resources, University of Wisconsin Press, vol. 34(3), pages 557-588.
    7. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    8. Udo Ebert & Patrick Moyes, 2002. "A Simple Axiomatization of the Foster, Greer and Thorbecke Poverty Orderings," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 4(4), pages 455-473, October.
    9. Guiso, Luigi & Jappelli, Tullio & Terlizzese, Daniele, 1996. "Income Risk, Borrowing Constraints, and Portfolio Choice," American Economic Review, American Economic Association, vol. 86(1), pages 158-172, March.
    10. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-231, March.
    11. Blundell, Richard & M. Stoker, Thomas, 1999. "Consumption and the timing of income risk," European Economic Review, Elsevier, vol. 43(3), pages 475-507, March.
    12. Gabbert, Silke & Weikard, Hans-Peter, 2001. "How widespread is undernourishment?: A critique of measurement methods and new empirical results," Food Policy, Elsevier, vol. 26(3), pages 209-228, June.
    13. repec:bla:jecsur:v:11:y:1997:i:2:p:123-62 is not listed on IDEAS
    14. repec:bla:revinw:v:45:y:1999:i:3:p:339-52 is not listed on IDEAS
    15. Stevens, Ann Huff, 1994. "The Dynamics of Poverty Spells: Updating Bane and Ellwood," American Economic Review, American Economic Association, vol. 84(2), pages 34-37, May.
    16. repec:bla:revinw:v:41:y:1995:i:4:p:405-26 is not listed on IDEAS
    17. Richard Blundell & Ian Preston, 1998. "Consumption Inequality and Income Uncertainty," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(2), pages 603-640.
    18. Edward J. Bird & Paul A. Hagstrom, 1999. "The Wealth Effects Of Income Insurance," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 45(3), pages 339-352, September.
    19. Edward J. Bird, 1995. "An Exploratory Comparison Of Income Risk In Germany And The United States," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 41(4), pages 405-426, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. P. Jenkins, Stephen & Gardiner, Karen & Burgess, Simon & Propper, Carol, 2000. "Measuring income risk," ISER Working Paper Series 2000-15, Institute for Social and Economic Research.
    2. Marchand, J. & Smeeding, T., 2016. "Poverty and Aging," Handbook of the Economics of Population Aging, in: Piggott, John & Woodland, Alan (ed.), Handbook of the Economics of Population Aging, edition 1, volume 1, chapter 0, pages 905-950, Elsevier.
      • Marchand, Joseph & Smeeding, Timothy, 2016. "Poverty and Aging," Working Papers 2016-11, University of Alberta, Department of Economics, revised 20 Nov 2016.
    3. Luigi Fabbris, Irene Sguotti, 2013. "Measuring Chronic Poverty In Italy," RIEDS - Rivista Italiana di Economia, Demografia e Statistica - The Italian Journal of Economic, Demographic and Statistical Studies, SIEDS Societa' Italiana di Economia Demografia e Statistica, vol. 67(2), pages 99-122, April-Jun.
    4. Duclos, Jean-Yves & Araar, Abdelkrim & Giles, John, 2010. "Chronic and transient poverty: Measurement and estimation, with evidence from China," Journal of Development Economics, Elsevier, vol. 91(2), pages 266-277, March.
    5. Núñez Velázquez, José Javier, 2009. "Estado actual y nuevas aproximaciones a la medición de la pobreza/Current Status and New Approaches to the Measurement of Poverty," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 27, pages 325-346, Agosto.
    6. Gordon Anderson, 2003. "Poverty in America 1970-1990: who did gain ground? An application of stochastic dominance criteria employing simultaneous inequality tests in a partial panel," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(6), pages 621-640.
    7. Christophe Muller, 2008. "The Measurement Of Poverty With Geographical And Intertemporal Price Dispersion: Evidence From Rwanda," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 54(1), pages 27-49, March.
    8. James E. Foster & Joel Greer & Erik Thorbecke, 2010. "The Foster-Greer-Thorbecke (FGT) Poverty Measures: Twenty-Five Years Later," Working Papers 2010-14, The George Washington University, Institute for International Economic Policy.
    9. Spryskov Dmitry, 2003. "Below the Poverty Line: Duration of Poverty in Russia," EERC Working Paper Series 03-04e, EERC Research Network, Russia and CIS.
    10. Iryna Kyzyma, 2020. "How Poor Are the Poor? Looking beyond the Binary Measure of Income Poverty," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 18(4), pages 525-549, December.
    11. Bigsten, Arne & Shimeles, Abebe, 2008. "Poverty Transition and Persistence in Ethiopia: 1994-2004," World Development, Elsevier, vol. 36(9), pages 1559-1584, September.
    12. Mauricio Gallardo, 2018. "Identifying Vulnerability To Poverty: A Critical Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 32(4), pages 1074-1105, September.
    13. Sabina Alkire & Mauricio Apablaza & Satya R. Chakravarty & Gaston Yalonetzky, 2014. "Measuring Chronic Multidimensional Poverty: A Counting Approach," OPHI Working Papers 75, Queen Elizabeth House, University of Oxford.
    14. James Foster & Joel Greer & Erik Thorbecke, 2010. "The Foster–Greer–Thorbecke (FGT) poverty measures: 25 years later," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 8(4), pages 491-524, December.
    15. Heindl, Peter & Schuessler, Rudolf, 2015. "Dynamic properties of energy affordability measures," Energy Policy, Elsevier, vol. 86(C), pages 123-132.
    16. Belhadj, Besma & Limam, Mohamed, 2012. "Unidimensional and multidimensional fuzzy poverty measures: New approach," Economic Modelling, Elsevier, vol. 29(4), pages 995-1002.
    17. Sanghamitra Bandyopadhyay, 2016. "The Vulnerable Are Not (Necessarily) the Poor," Research on Economic Inequality, in: Inequality after the 20th Century: Papers from the Sixth ECINEQ Meeting, volume 24, pages 29-57, Emerald Group Publishing Limited.
    18. Philippe Kerm, 2002. "How much low income turnover is there in Belgium?," Journal of Economics, Springer, vol. 9(1), pages 341-363, December.
    19. Arnstein Aassve & Simon Burgess & Matt Dickson & Carol Propper, 2005. "Modelling Poverty by not Modelling Poverty: An Application of a Simultaneous Hazards Approach to the UK," The Centre for Market and Public Organisation 05/134, The Centre for Market and Public Organisation, University of Bristol, UK.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jns:jbstat:v:224:y:2004:i:3:p:337-350. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.