The decomposition of unidimensional poverty measures

Every poverty measure should take into account three poverty components; the incidence of poverty, the intensity of poverty and the inequality among the poor. It would be very interesting if all poverty measures could be decomposed as a function of these three poverty terms. If this is the case, the sources of changes in poverty would be easier to compute, since the contribution of each term to the total poverty change would be known. There exist archetypical indices to measure the intensity and inequality among the poor, which are the Headcount ratio and the Income Gap Ratio. However, the inequality among the poor can be measured using different inequality measures and these can also focus on both the income and the gap of the poor. This chapter presents most of the poverty decompositions in incidence, intensity and inequality among the poor, existing in the literature.