On Mortality and Poverty: An Axiomatic Approach With A Modified Index

The purpose of this note is to analyze a somewhat novel aspect of poverty measurement, namely the impact of premature deaths of poor people on measured poverty. The perverse results one could easily obtain theoretically can be illustrated by using the widely used headcount ratio index. The proposal for a correction offered here involves the introduction of a new axiom of biological stress (ABS) to handle the case of premature mortality among the poor specifically, and to address the issue of increasing biological stress generally. A new headcount ratio index adjusted for the specific biological stress leading to premature deaths among the poor is constructed. It is simple, consistent with ABS, and easy to estimate. It is hoped that given the relevance of the critical demographic variables already acknowledged in the literature, the new index will be of use to the poverty reduction specialists.