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On Measuring Global Poverty
Economic literature: papers , articles , software , chapters , books. Registered: Christoph Lakner. The goals of ending extreme poverty by and working toward a more equal distribution of income are prominent in international development and agreed upon in the United Nations'Sustainable Development Goals 1 and Using data from countries comprising 97 percent of the world's population, this paper simulates a set of scenarios for global poverty from to under different assumptions about growth and inequality. They are also designed to ensure that all nations and national governments have a stake in, and are actively engaged with, the attack on global poverty that is central to the SDG agenda.
Economics Nobel honors trio taking an experimental approach to fighting poverty | Science | AAAS
The second part of the Report addresses the role and use of complementary poverty measures and what form they should take. The need to take a broader view of poverty than one focused entirely on economic resource measures income or consumption-based is implicit in SDG Goal 1. Alkire et al.
The approach favoured by the Commission emphasises that the proposed complementary indicators CIs should a complement not replace the headline global poverty measures or counts already discussed, b be sufficiently small in number to receive prominence in public debate and policy making and c be based on an explicit set of principles that is endorsed by a process of external consultation. The first CI proposed is the mean poverty gap — measured over the whole population and expressed relative to the poverty line.
This latter idea is the subject of a separate recommendation for an extended poverty measure that takes account, above a threshold level, of the actual standard of living in each country. The reasoning behind this recommendation rests on the idea that the levels of consumption needed to achieve certain levels of functioning or achievements vary with the overall standard of living in a country, so that to paraphrase Sen, a standard that is absolute in the space of commodities will vary relatively over time and across countries in the space of resources, as is evident from the contributions by Ravallion and Chen , and Chen and Ravallion The Report contains a fascinating discussion of the merits and weaknesses of these and other possible CIs that should be essential reading for all those interested in poverty measurement.
A range of poverty lines tied to the IPL itself would run the risk of further undermining its legitimacy by replicating its problems and weaknesses. The strengths of the capability approach developed by Sen , are discussed with specific emphasis given to its ability to highlight the interdependence that exists between different individuals and groups in society.
It is by drawing out these linkages that the Report provides the rationale for focusing on the non-monetary dimensions of poverty and on the role of multi-dimensional poverty indicators. The logic of this sequencing is reinforced by a brief discussion of human rights, where it is noted that such rights relate to individuals, are universal and cover many non-economic areas, including access to clean water, adequate shelter and clothing and to basic education and health services. But how are these additional dimensions to be determined?
Gordon : Appendix 2.
Notwithstanding these issues, the multi-dimensional approach to poverty measurement is already being applied in countries like Bhutan and Mexico and in the multi-dimensional poverty index MPI produced by the United Nations Development Programme UNDP, Human Development Report since What does all this mean for Australia? A useful and informative starting point is to consider whether or not extreme poverty currently exists in Australia, when measured using the existing dollar a day poverty line. While many might see this as a pointless exercise since that type of deep poverty was eradicated long ago, the evidence does not appear to support this position.
The proposed IPL will presumably be published regularly by the World Bank and is likely to form part of future poverty studies that will use it to set a floor on the level of Australian poverty. Australia will also be the subject of a two-page NPSR that describes how it is measuring and monitoring poverty.
Although responsibility will lie with the Bank, it seems likely that the reports will draw on material provided to them by national governments. This will mean that the Australian Government will be required to provide the relevant data, including the AUD value of the IPL and its relation to existing poverty lines, to explain how these are constructed and what they imply for the level and change in poverty, and to describe the portfolio of complementary poverty indicators including non-monetary indicators that are being used or considered.
ABS, It would take a minor effort to extend the income distribution tables to include poverty rates measured using median income-based poverty lines. There has to date been little work done on developing a MPI for Australia — in part because of the lack of a single data source that covers the various dimensions of poverty. The FPM has three dimensions: income poverty measured using the median income approach , health status measured by the presence of a disability and educational attainment at least to year The IDM is based on 15 indicators that cover hunger, access to water, access to health care, years of schooling, control of decision-making within the household, experience of violence, control over use of contraception and status and respect in paid and unpaid work see Bessell, : Table 1.
They are a valuable first step on what is likely to be a long journey — albeit one that has become more feasible with the inclusion in of a suite of questions on material deprivation in the Household, Income and Labour Dynamics in Australia HILDA survey.
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No longer will it be possible for governments to ignore the impact on poverty when designing new policies or assessing the impact of existing ones. The Atkinson Report provides a blueprint for countries like Australia to show that they mean business when it comes to tackling poverty, domestically as well as globally, relatively as well as absolutely and above all, multi-dimensionally.
Tony Atkinson made seminal contributions to the economic analysis of poverty and inequality that were pivotal in encouraging a generation of applied economists to follow in his footsteps, resulting in stronger analysis, improved data, better policies and improved outcomes for the poor and vulnerable. It is fitting that his final contribution is directed at improving the measurement and monitoring of poverty among the poorest countries in the world, since this is where improved understanding and extra effort is most needed and likely to produce the greatest benefit.
The fact that he was able to devote the last months of his life to such an important venture speaks volumes about the quality of his work and the qualities of the man.
Monitoring and addressing global poverty: A new approach and implications for Australia
Many scholars have been similarly affected by his work and his personal decency, as the recent paper by Brandolini et al. Given the quality and scope of his contributions to the discipline of economics, how he never won the Nobel Prize is beyond me. What a record. What a man. What a loss.
It is perhaps worth noting that empirical poverty research at that time was at least in Europe dominated by sociologists, following major contributions in Britain by Abel-Smith and Townsend and Townsend and in Sweden by the emergence of the Level of Living surveys Johansson, Atkinson has acknowledged that the impetus for his book came from the work of Abel-Smith and Townsend. The fact that this article focuses on this aspect of the SDGs should not be taken to imply that the other goals and targets are not also important.
They are. The methods used to derive the different versions of the extreme poverty line are described in Ravallion et al. The only other widely used International Poverty Line IPL , equal to one-half of median equivalised income, is less obviously acceptable as an appropriate benchmark and incapable of being expressed in a single, universal monetary amount. Fuller accounts of the merits and limitations of the dollar a day measure can be found in several papers in Anand et al.
See also Klasen and Part 2 of Ravallion Other critics of the dollar a day line include Klasen , who notes that the dollar a day line often bears little relation to national poverty lines — even for some countries whose poverty lines were used to develop the global poverty line in the first place. He also notes that the purchasing power parity PPP estimates used to convert the global poverty line to national currencies are subject to regular revision, and this has a huge impact on estimated levels of and changes in national and global poverty.
The numbers in absolute poverty declined over this period from 1. Although use of the mean poverty gap can be seen as problematic since it gives greatest weight to those who are furthest below the poverty line and thus magnifies any errors in the data for those reporting very low incomes, this could be remedied by replacing the mean by the median.
The report also recommends that the MPI be based on the adjusted headcount ratio proposed by Alkire and Foster which multiplies the headcount ratio by the severity of deprivation among the poor. This ensures that the measure satisfies dimensional monotonicity and thus declines whenever any individual ceases to be deprived on any dimension. These calculations ignore the difference between the equivalence factor used in conventional poverty studies and the per capita adjustment that is embedded in the global poverty line calculations.
However, this difference is likely to have a minor impact on the results presented, which are in any case intended to be illustrative only. It can be argued that many of the low-income self-employed are inappropriately identified as poor because their incomes are artificially reduced by the deduction of business losses. There is an element of truth in this and for this reason, many poverty studies exclude the self-employed from the calculations Saunders et al. His research interests include poverty and income distribution, household needs and living standards, social security reform, comparative social policy and ageing and social protection in China.
He was elected a Fellow of the Academy of the Social Sciences in Australia in and is currently an Australian Professorial Fellow working on the concepts and measurement of poverty and inequality and on deprivation and social exclusion in Australia. Skip to main content. The Economic and Labour Relations Review.
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