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A New Poverty Decomposition

Abstract

This note proposes a new poverty decomposition that can be used to explain changes in poverty over time. The change in poverty is derived as the exact sum of four elements: (i) the overall growth effect, assuming inequality in the distribution does not change; (ii) the impact of differences in growth rates between the groups; (iii) the effect of the change in inequality within the different groups; (iv) the impact of changes in the population shares of the various groups.

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Son, H.H. A New Poverty Decomposition. The Journal of Economic Inequality 1, 181–187 (2003). https://doi.org/10.1023/A:1026122624752

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  • economic growth
  • inequality
  • poverty