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An Illustration of the Average Time Measure of Poverty

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The goal of the World Bank is 'a world free of poverty' but the most widely used poverty measures do not show when poverty might be eliminated. The 'head-count index' simply counts the poor, while the 'poverty gap index' shows their average shortfall from the poverty line. Neither measure reflects changes in the distribution of incomes amongst the poor, but squaring the poverty gap brings sensitivity to inequality, albeit at the cost of intuitive interpretation. This paper illustrates a new measure of poverty [Morduch, J., 1998, Poverty, Economic Growth and Average Exit Time, Economics Letters, 59: 385-390]. This new poverty measure is distributionally-sensitive and has a ready interpretation as the average time taken to exit poverty with a constant and uniform growth rate. The illustration uses data from Papua New Guinea, which is the country with the highest degree of inequality in the Asia-Pacific region.

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  • John Gibson & Susan Olivia, 2002. "An Illustration of the Average Time Measure of Poverty," Working Papers in Economics 02/04, University of Waikato.
    • Handle: RePEc:wai:econwp:02/04
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    1. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    2. John Gibson, 2000. "The Papua New Guinea Household Survey," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 33(4), pages 377-380, December.
    3. Kakwani, Nanak, 1980. "On a Class of Poverty Measures," Econometrica, Econometric Society, vol. 48(2), pages 437-446, March.
    4. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-231, March.
    5. Morduch, Jonathan, 1998. "Poverty, economic growth, and average exit time," Economics Letters, Elsevier, vol. 59(3), pages 385-390, June.
    6. ,, 2000. "Problems And Solutions," Econometric Theory, Cambridge University Press, vol. 16(2), pages 287-299, April.
    7. Deaton, A., 2000. "Counting the World's Poor: Problems and Possible Solutions," Papers 197, Princeton, Woodrow Wilson School - Development Studies.
    8. Foster, James E, 1994. "Normative Measurement: Is Theory Relevant?," American Economic Review, American Economic Association, vol. 84(2), pages 365-370, May.
    9. Ravallion, Martin & Bidani, Benu, 1994. "How Robust Is a Poverty Profile?," The World Bank Economic Review, World Bank, vol. 8(1), pages 75-102, January.
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    More about this item

    Keywords

    growth; inequality; poverty;
    All these keywords.

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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