Poverty Measurement under Income and Price Dispersions
Abstract
This chapter discusses facts, methods and empirical results that pertain to poverty measurement under income and price dispersions. The correlation of prices and living standards is examined, and its origins are considered, in terms of whether such origins are related to consumer preferences, economic interactions and market imperfections. Then, the relationship of price dispersion and aggregate social indicators-including poverty measures-is analysed by combining stochastic hypotheses about prices and incomes with normative properties of social and poverty indicators. Finally, empirical results about how dispersed heterogeneous price indices affect poverty measurement, anti-poverty targeting and poverty-alleviation price reforms are reviewed.
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