Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/150928
Authors: 
Faik, Jürgen
Year of Publication: 
2011
Series/Report no.: 
SOEPpapers on Multidisciplinary Panel Data Research 383
Abstract: 
In this paper an alternative approach with regard to poverty measurement is discussed: the so-called decomposition approach. This method differentiates between various social groups in the sense that for each group a separate poverty line is determined. E. g., household size might be a criterion for such a social differentiation. By doing this, the problem of traditional poverty measurement to refer to income-independent equivalence scales is principally avoided. Moreover, the further problem of the traditional method, namely to determinea (general) poverty line as a more or less arbitrary fraction of society's mean welfare level, does not exist, on principle, in the decomposition approach. Present author's own calculations reveal higher poverty levels indicated by this approach compared with the conventional method of measuring (income) poverty. Since it appears to be realistic that some people perform their poverty assessments through a "mixture" of their own group's and overall welfare levels, at a plausible degree of economies of scale (i. e., Buhmann et al.'s · > 0.65) the poverty levels of the decomposition approach can be interpreted as upper limits for the "true" level of poverty, and, conversely, the degree of poverty ascertained by the conventional approach can be seen as a lower limit for "true" poverty.
Subjects: 
Welfare
poverty measurement
decomposition approach
equivalence scales
JEL: 
I31
I32
P46
Document Type: 
Working Paper

Files in This Item:
File
Size
351.75 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.