2009 Reports

Poverty or Income Distribution: Which Do We Want to Measure?

Johnston, Robert

The concepts of poverty, poverty line, levels of income and expenditure, low income and inequality have been in the statistician's vocabulary for more than a century. While statisticians have considerable experience to draw on in trying to understand them, we can also see from this history that there has always been considerable confusion and overlap among them. I propose that we can benefit by studying concepts of poverty on the one hand and income distribution (including inequality) on the other separately, rather than trying to subsume them in a single analysis. This will provide a better basis for deciding what it is we define as "poverty" for measurement purposes, at least from an international development perspective (only one of many perspectives which might be used, of course), and will then help us to consider how to measure it and with what available tools.