A class of chronic poverty measures
This paper presents a new family of chronic poverty measures based on the P<sub>α</sub> poverty measures of Foster, Greer,and Thorbecke (1984). The chronically poor are identified using two cutoffs: a standard poverty line, which identifies the time periods during which a person is poor; and a duration cutoff, which is the minimum percentage of time a person must be in poverty in order to be chronically poor. The new family of chronic poverty measures is constructed by raising the (per-period) normalized gaps of the chronically poor to a power α ≥ 0 and then aggregating. The resulting indices, which can be viewed as duration adjusted P<sub>α</sub> measures, satisfy a battery of properties for chronic poverty indices, including time monotonicity and population decomposability. An illustrative application of the family is provided using data from Argentina.
Foster, J. A class of chronic poverty measures. (2007) 26 pp. [Vanderbilt University Department of Economics Working Papers VU07-WP01]