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Unambiguous Trends Combining Absolute and Relative Income Poverty: New Results and Global Application

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  • Benoit Decerf
  • Mery Ferrando

Abstract

Over the period 1990–2015, many countries experienced a reduction in extreme absolute poverty and an increase in relative poverty. As a result, the global trend of “overall” income poverty, which combines absolute and relative poverty, may depend on arbitrary normative choices such as the priority given to the absolutely poor over the relatively poor. This article proves that, if one assumes that an individual who is absolutely poor is poorer than an individual who is only relatively poor, the overall poverty trend is sometimes independent of the priority parameter, even for cases for which absolute and relative poverty follow opposite trends. A survey conducted for this study suggests that this normative assumption collects broad support. This article applies overall poverty measures satisfying this assumption to assess the evolution of global poverty from 1990 to 2015. Results show that global overall poverty has been (at least) halved, regardless of the value chosen for the priority parameter.

Suggested Citation

  • Benoit Decerf & Mery Ferrando, 2022. "Unambiguous Trends Combining Absolute and Relative Income Poverty: New Results and Global Application," The World Bank Economic Review, World Bank, vol. 36(3), pages 605-628.
    • Handle: RePEc:oup:wbecrv:v:36:y:2022:i:3:p:605-628.
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    File URL: http://hdl.handle.net/10.1093/wber/lhab028
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    References listed on IDEAS

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    1. François Bourguignon, 2015. "The Globalization of Inequality," Economics Books, Princeton University Press, edition 1, number 10433.
    2. Decerf, Benoit, 2017. "Why not consider that being absolutely poor is worse than being only relatively poor?," Journal of Public Economics, Elsevier, vol. 152(C), pages 79-92.
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    7. Dean Jolliffe & Espen Beer Prydz, 2021. "Societal Poverty: A Relative and Relevant Measure," The World Bank Economic Review, World Bank, vol. 35(1), pages 180-206.
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    Cited by:

    1. Decerf,Benoit Marie A & Fonton,Kike Yra, 2023. "Reconceptualizing Global Multidimensional Poverty Measurement, with Illustration on Nigerian Data," Policy Research Working Paper Series 10577, The World Bank.

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