IDEAS home Printed from https://ideas.repec.org/p/gwi/wpaper/2015-10.html
   My bibliography  Save this paper

Person Equivalent Headcount Measures of Poverty

Author

Listed:
  • Tony Castleman

    (Institute for International Economic Policy, George Washington University)

  • James E. Foster

    (Elliott School of International Affairs, George Washington University and the Oxford Poverty and Human Development Initiative (OPHI), Oxford Department of International Development, Queen Elizabeth House, University of Oxford)

  • Stephen C. Smith

    (George Washington University)

Abstract

Headcount meatures of poverty are by far the most common tools for evaluating poverty and gauging progress in global development goals. The headcount ratio, or prevalence of poverty, and the headcount, or the number of the poor, both convey tangible information about poverty. But both ignore the depth of poverty, so they arguably present distorted views of the spatial distribution of poverty as well as the extent of progress against poverty over time. Additionally, headcount measures can provide incentives for policymakers to focus their effects on the least poor, an observation well understood among policymakers themselves. While other poverty measures mitigate these problems by capturing the intensity as well as the prevalence of poverty, they are often dismissed from the policy discourse as being too unintiutive to have traction. Theere is a need for poverty measures that go beyond traditional headcount measures, but retain their direct interpretation. This paper presents person equivalent (p. e.) headcount measures, which do just that. Our approach draws on the logic of full-time equivalent jobs, adult equivalent incomes, and other constructs in economics. An initial period is used to calibrate the average depth of poverty among the poor, which then becomes the "person equivalent" underlying the p. e. headcount and the p. e. headcount ratio. We illustrate our methods using $1.25 a day poverty data from 80 countries as provided by the World Bank, and show how the new measures map out different pictures of poverty and progress than traditional headcount measures. Overall, the picture is one of a more rapid decline in global poverty, but with significant redistributions of its burden across regions and countries. For example, p. e. headcounts are much higher than traditional headcounts in Latin America and the Caribbean and Sub Saharan Africa; in South Asia and East Asia and the Pacific the reverse is true. In Nigeria the traditional headcount rose by 28 million and p. e. headcount rose by 50 million; in South Africa the p. e. headcount fell by more than the traditional headcount. We discuss properties of the new measures, outline some generalizations and conclude with recommendations for using this approach in development goals to track progress and direct policy.

Suggested Citation

  • Tony Castleman & James E. Foster & Stephen C. Smith, 2015. "Person Equivalent Headcount Measures of Poverty," Working Papers 2015-10, The George Washington University, Institute for International Economic Policy.
  • Handle: RePEc:gwi:wpaper:2015-10
    as

    Download full text from publisher

    File URL: http://www.gwu.edu/~iiep/assets/docs/papers/2015WP/CastlemanFosterSmithIIEPWP201510.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Alkire, Sabina & Foster, James & Seth, Suman & Santos, Maria Emma & Roche, Jose Manuel & Ballon, Paola, 2015. "Multidimensional Poverty Measurement and Analysis," OUP Catalogue, Oxford University Press, number 9780199689491.
    2. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    3. Alkire, Sabina & Foster, James, 2011. "Counting and multidimensional poverty measurement," Journal of Public Economics, Elsevier, vol. 95(7), pages 476-487.
    4. Sen, Amartya, 1997. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198292975.
    5. James Foster & Suman Seth & Michael Lokshin & Zurab Sajaia, 2013. "A Unified Approach to Measuring Poverty and Inequality--Theory and Practice : Streamlined Analysis with ADePT Software," World Bank Publications - Books, The World Bank Group, number 13731.
    6. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-427, June.
    7. World Bank & International Monetary Fund, 2010. "Global Monitoring Report 2010 : The MDGs after the Crisis," World Bank Publications - Books, The World Bank Group, number 2444.
    8. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    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. Dipesh Gangopadhyay & Robert B. Nielsen & Velma Zahirovic-Herbert, 2021. "Methodology and Axiomatic Characterization of a Multidimensional and Fuzzy Measure of Deprivation," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 153(1), pages 1-37, January.
    2. Grant J. Cameron & Hai‐Anh H. Dang & Mustafa Dinc & James Foster & Michael M. Lokshin, 2021. "Measuring the Statistical Capacity of Nations," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 83(4), pages 870-896, August.
    3. Sabina Alkire, 2016. "Measures of Human Development: Key Concepts and Properties," OPHI Working Papers ophiwp107.pdf, Queen Elizabeth House, University of Oxford.
    4. Suman Seth and Gaston Yalonetzky, 2018. "Assessing Deprivation with Ordinal Variables: Depth Sensitivity and Poverty Aversion," OPHI Working Papers ophiwp123.pdf, Queen Elizabeth House, University of Oxford.
    5. Basu, Kaushik, 2013. "Shared prosperity and the mitigation of poverty : in practice and in precept," Policy Research Working Paper Series 6700, The World Bank.
    6. Suman Seth & Gaston Yalonetzky, 2021. "Assessing Deprivation with an Ordinal Variable: Theory and Application to Sanitation Deprivation in Bangladesh," The World Bank Economic Review, World Bank, vol. 35(3), pages 793-811.
    7. Sabina Alkire and James Foster, 2016. "Dimensional and Distributional Contributions to Multidimensional Poverty," OPHI Working Papers ophiwp100_2.pdf, Queen Elizabeth House, University of Oxford.
    8. Suman Seth, Sabina Alkire, 2014. "Measuring and Decomposing Inequality among the Multidimensionally Poor Using Ordinal Data: A Counting Approach," OPHI Working Papers 68, Queen Elizabeth House, University of Oxford.
    9. Okushima, Shinichiro, 2017. "Gauging energy poverty: A multidimensional approach," Energy, Elsevier, vol. 137(C), pages 1159-1166.
    10. 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.
    11. Espinoza-Delgado, José & Silber, Jacques, 2018. "Multi-dimensional poverty among adults in Central America and gender differences in the three I’s of poverty: Applying inequality sensitive poverty measures with ordinal variables," MPRA Paper 88750, University Library of Munich, Germany.
    12. Hendrik Thiel & Stephan L. Thomsen, 2015. "Individual Poverty Paths and the Stability of Control-Perception," SOEPpapers on Multidisciplinary Panel Data Research 794, DIW Berlin, The German Socio-Economic Panel (SOEP).
    13. Eleftherios Giovanis & Oznur Ozdamar, 2021. "Regional employment support programs and multidimensional poverty of youth in Turkey," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 11(4), pages 583-609, December.
    14. Christophe Muller & Asha Kannan & Roland Alcindor, 2016. "Multidimensional Poverty in Seychelles," Working Papers halshs-01264444, HAL.
    15. Pinaki Das & Bibek Paria & Shama Firdaush, 2021. "Juxtaposing Consumption Poverty and Multidimensional Poverty: A Study in Indian Context," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 153(2), pages 469-501, January.
    16. Constantine Angyridis & Brennan Scott Thompson, 2016. "Negative income taxes, inequality and poverty," Canadian Journal of Economics, Canadian Economics Association, vol. 49(3), pages 1016-1034, August.
    17. Alkire, Sabina & Roche, José Manuel & Vaz, Ana, 2017. "Changes Over Time in Multidimensional Poverty: Methodology and Results for 34 Countries," World Development, Elsevier, vol. 94(C), pages 232-249.
    18. Sabina Alkire & James Foster, 2011. "Understandings and misunderstandings of multidimensional poverty measurement," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(2), pages 289-314, June.
    19. Andrea Brandolini & John Micklewright, 2020. "Tony Atkinson’s new book, Measuring Poverty Around the World. Some further reflections," Working Papers 518, ECINEQ, Society for the Study of Economic Inequality.
    20. Florent Bresson & Jean-Yves Duclos & Flaviana Palmisano, 2019. "Intertemporal pro-poorness," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 52(1), pages 65-96, January.

    More about this item

    Keywords

    Poverty measurement; headcount; poverty gap; FGT indices; development goals; inclusive growth; multidimensional poverty;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:gwi:wpaper:2015-10. 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: Kyle Renner (email available below). General contact details of provider: https://edirc.repec.org/data/iigwuus.html .

    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.