Global Income Poverty Measurement with Preference Heterogeneity: Theory and Application

Absolute and Relative Poverty Measurement: A Survey

“…As noted by Atkinson and Bourguignon (2001), an 'overall' measure should not only use a specific 'societal' poverty line, but also a specific poverty index. Decerf et al (2022) show that the 'overall' measure is reduced when a poor individual escapes poverty only if the poverty index is 'hierarchical'. They suggest using a particular hierarchical index that is a simple modification of the head-count ratio.…”

“…Recently, Decerf et al (2022) propose a theoretical framework that allows making progress on two limitations of the literature. First, the literature assumes the existence of a common welfare function w that makes the same trade-off between own income and relative income for all individuals.…”

“…Second, the literature has only studied the implications of welfare-consistency on the poverty line. Decerf et al (2022) study the implications for the poverty line and for the poverty index of the "escaping-poverty" property, i.e., the requirement that the poverty measure is reduced when a poor individual escapes poverty.…”