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Bottom Incomes and the Measurement of Poverty: A Brief Assessment of the Literature

Author

Listed:
  • Lidia Ceriani

    (Georgetown University, Washington DC, USA.)

  • Vladimir Hlasny

    (Ewha Womans University, Seoul, South Korea.)

  • Paolo Verme

    (World Bank, Washington DC, USA.)

Abstract

The paper discusses the main issues related to negative and zero incomes that are relevant for the measurement of poverty. It shows the prevalence of non-positive incomes in high- and middle-income countries, provides an analysis of the sources and structure of these incomes, outlines the various approaches proposed by scholars and statistical agencies to treat non-positive incomes, and explains how non-positive incomes and alternative correction methods impact the measurement of standard poverty indexes. It is argued that negative and zero incomes cannot be treated equally in terms of household well-being and that standard methods used by practitioners fail to recognize this fact likely resulting in overestimations of poverty.

Suggested Citation

  • Lidia Ceriani & Vladimir Hlasny & Paolo Verme, 2021. "Bottom Incomes and the Measurement of Poverty: A Brief Assessment of the Literature," Working Papers 589, ECINEQ, Society for the Study of Economic Inequality.
    • Handle: RePEc:inq:inqwps:ecineq2021-589
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    File URL: http://www.ecineq.org/milano/WP/ECINEQ2021-589.pdf
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    References listed on IDEAS

    as
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    Cited by:

    1. Brunori, Paolo & Salas-Rojo, Pedro & Verme, Paolo, 2022. "Estimating Inequality with Missing Incomes," GLO Discussion Paper Series 1138, Global Labor Organization (GLO).

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    More about this item

    Keywords

    Welfare measurement; Well-being; Poverty targeting; High- and middle-income countries; Survey non-response; Negative incomes; Zero incomes; Extreme income corrections;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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