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Reference groups and the poverty line: An axiomatic approach with an empirical illustration

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  • Satya R. Chakravarty
  • Nachiketa Chattopadhyay
  • Zoya Nissanov
  • Jacques Silber

Abstract

A recent trend in the study of poverty is to consider a relative poverty line, one that is responsive to the nature of the income distribution. We develop an axiomatic approach to the determination of an amalgam poverty line. Given a reference income (e.g. the mean or the median), the amalgam poverty line becomes a weighted average of the absolute poverty line and the reference income, where the weights depend on the policy maker's preferences for aggregating the two components.

Suggested Citation

  • Satya R. Chakravarty & Nachiketa Chattopadhyay & Zoya Nissanov & Jacques Silber, 2015. "Reference groups and the poverty line: An axiomatic approach with an empirical illustration," WIDER Working Paper Series wp-2015-002, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2015-002
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    References listed on IDEAS

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    6. Martin Ravallion & Gaurav Datt & Dominique van de Walle, 1991. "Quantifying Absolute Poverty In The Developing World," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 37(4), pages 345-361, December.
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    Cited by:

    1. Ghazali, Samane & Zibaei, Mansour & Azadi, Hossein, 2023. "Impact of livelihood strategies and capitals on rangeland sustainability and nomads' poverty: A counterfactual analysis in Southwest Iran," Ecological Economics, Elsevier, vol. 206(C).
    2. Ravallion,Martin & Chen,Shaohua, 2017. "Welfare-consistent global poverty measures," Policy Research Working Paper Series 8170, The World Bank.
    3. Fernández-Morales, Antonio, 2016. "Measuring poverty with the Foster, Greer and Thorbecke indexes based on the Gamma distribution," MPRA Paper 69648, University Library of Munich, Germany.

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    More about this item

    Keywords

    Econometric models (Economic development); Income distribution; Poverty measurement; Methodology (Poverty);
    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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