Changing population weights in a decomposable poverty index

A distribution-sensitive poverty measure developed by Foster, Greer, and Thorbecke has several characteristics which strongly recommend its use in applied poverty analysis. This article expands its usefulness by deriving an analytical expression that exactly decomposes a change in the index into: 1)...

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Bibliographic Details
Published in:Journal of economic and social measurement 2000, Vol.26 (1), p.1-10
Main Author: DeFina, Robert H.
Format: Article
Language:English
Subjects:
Demographic Change
Income
Income Distribution
Indexation
Indexes (Measures)
Low Income Groups
Mathematical Models
Measurement
Polls & surveys
Population
Poverty
Social change
U.S.A
United States of America
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Summary:A distribution-sensitive poverty measure developed by Foster, Greer, and Thorbecke has several characteristics which strongly recommend its use in applied poverty analysis. This article expands its usefulness by deriving an analytical expression that exactly decomposes a change in the index into: 1) growth due to population-share changes; and, 2) growth due to within-group poverty changes. It also adjusts the basic index to allow for multiple poverty lines, as are used in the United States. The theoretical framework is applied to Current Population Survey data to examine how U.S. population-share changes in industry, race, and family-structure categories have contributed to growth in the index between 1979 and 1996. The effects of these structural shifts have been a special concern to policy makers throughout the past decade. Resulting computations indicate that these share changes have played only a minor role. Most of index's growth instead stems from within-group poverty increases.
ISSN:0747-9662
1875-8932
2523-5338
DOI:10.3233/JEM-2000-0167