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Poverty Without Poverty Line

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  • Olivier Sterck

Abstract

I propose a new cardinal measure of poverty, which builds on the intuitive notion that a person with half the income of another is twice as poor. Mathematically, this implies that poverty is the reciprocal of income. The resulting aggregate measure has a simple interpretation: it is the average number of days needed to get a reference level of income. I call the measure average poorness, to reflect the fact that poverty is a spectrum and not a binary status. The new measure has excellent properties, being additively decomposable in population subgroups, fully accounting for the depth and severity of poverty, and generating orderings and comparisons that are robust to the choice of reference level of income. Using data from a survey experiment, I show that the new measure is consistent with how a majority of experts and members of the public think about poverty.

Suggested Citation

  • Olivier Sterck, 2024. "Poverty Without Poverty Line," CSAE Working Paper Series 2024-07, Centre for the Study of African Economies, University of Oxford.
    • Handle: RePEc:csa:wpaper:2024-07
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    More about this item

    Keywords

    Poverty; Average Poorness; Poverty line; Focus Axiom;
    All these keywords.

    JEL classification:

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

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