Social Groups and Economic Poverty: A Problem in Measurement

Abstract

This paper points to some elementary conflicts between the claims of interpersonal and intergroup justice as they manifest themselves in the process of seeking a real-valued index of poverty which is required to satisfy certain seemingly desirable properties. It indicates how 'group-sensitive' poverty measures, similar to the Anand-Sen (1995) 'Gender Adjusted Human Development Index' and the Subramanian-Majumdar (2002) 'Group-Disparity Adjusted Deprivation Index', may be constructed. Some properties of a specific 'group-sensitive' poverty index are appraised, and the advantage of having a 'flexible' measure which is capable of effecting a tradeoff between the claims of interpersonal and inter-group equality is spelt out. The implications of directly incorporating group disparities into the measurement of poverty for poverty comparisons and anti-poverty policy are also discussed.

Inter-group Disparities in the Distributional Analysis of Human Development: Concepts, Measurement, and Illustrative Applications

“…The author, in the work cited, employs data from the Human Development Report 1999, and computes, for the year 1997, a decomposable headcount measure of income poverty called the 'triage' headcount ratio (whose precise meaning is of no urgent relevance in the present context) for each of the seven country-groups considered earlier in Table 1 of this paper, and for the world as a whole. Table 2 here reproduces much of the information provided in Table 7.1 of Subramanian (2006). The global headcount ratio of poverty, call it P, is 18.6 per cent.…”

“…In general, welfare considerations which require 'adjusting' a deprivation measure in order to incorporate judgments on inter-group inequality can have normative implications for distributive justice which are at odds with the intuition that informs judgments on inter-personal distributive justice. (The issue involved is the complex one of inequality and welfare analyses of heterogeneous, as opposed to homogeneous, distributions; for a rigorous theoretical treatment of the problem, the reader is referred to Shorrocks 2004; and for considerations relating to 'group-sensitive' deprivation measures, some relevant papers would include Subramanian 1999 andSubramanian 2006). In what follows, I briefly review two approaches to 'adjusting' a decomposable measure of deprivation to make it reflect group inequality as a component of aggregate 'illfare'.…”

“…For the special case in which λ=2, note from (9) that Excerpted from Table 7.1 of Subramanian (2006) But note now that the squared coefficient of variation SCV in the inter-group distribution of the P j is given by (12),…”

“…Subramanian (2006) provides an empirical application of the measure P* (for the case in which λ=2). The author, in the work cited, employs data from the Human Development Report 1999, and computes, for the year 1997, a decomposable headcount measure of income poverty called the 'triage' headcount ratio (whose precise meaning is of no urgent relevance in the present context) for each of the seven country-groups considered earlier in Table 1 of this paper, and for the world as a whole.…”

Can a Poverty-Reducing and Progressive Tax and Transfer System Hurt the Poor?

“…It would not necessarily be evaluated as superior by a measure satisfying poverty focus and monotonicity but not anonymity, however. Other concerns with the anonymity axiom have also been pointed out: for example, it can clash with the Pigou-Dalton transfer axiom when there are households of different types (Ebert, 1997) and with the subgroup sensitivity axiom, an extension of the Pigou-Dalton transfer axiom to subgroups (Subramanian, 2006). -even if reranking occurs, the order of the y 1 vector reflects the pre-fisc income ranking.…”