Pro‐Poorness Orderings

Abstract

An indicator of pro‐poorness of a growth profile associated with a distribution of income is a measure of the extent to which growth is biased towards the poor. This paper proposes a general approach to pro‐poorness, called the progressive sequential averaging principle (PSA), relaxing the requirement of rank preservation due to growth. An endogenous benchmark for evaluating the growth of poor comes out naturally from this principle. A dominance relation on the basis of the above approach for a class of growth profiles is introduced through a simple device, called the PSA curve and its properties are examined in relation to the standard dominances in terms of the generalized Lorenz curve and the inverse generalized Lorenz curve. The paper concludes with an application to evaluate growth profiles experienced by the United States between 2001–07 and 2007–13.

Rising mean incomes for whom?

“…It has become clear that mean income is an imperfect welfare indicator to trace over time, if a growing mean income does not entail improvements in living standards for large parts of the population. While this is an active research area with many contributions [see for instance [8][9][10], there is an ongoing discussion about how to measure the inclusiveness of growth in a simple and transparent way.…”

“…Our work also relates to the literature strand of the growth effects on poverty. First, there is a huge literature on the measurement of pro-poor growth specifically [see for instance 8 , 9 , 16 , 17 ], focusing exclusively on the lower end of the income distribution. For example, Kakwani and Son [ 18 ] define a poverty-equivalent growth rate by relating mean-income growth to its distributional effects between the poor and non-poor.…”

A Technical Note on New Applications of Lorenz Curves in Business Based on Pareto Principles

“…Other papers such as Cromley (2019) used Lorenz curve to measure differential access to facilities by subgroups of the population. A measure of the extent to which growth is biased towards the poor was conducted by Chakravarty, Chattopadhyay, and D'Ambrosio (2019) by using the properties of generalized Lorenz curves and inverse generalized Lorenz curves. Similarly, Ferreira, Firpo, and Galvao (2019) used the delta Lorenz curve to investigate how different economic growth episodes display very different distributional characteristics both across countries and overtime.…”