A new class of chronic poverty measures is constructed that builds upon Jalan and Ravallion (1998) but does not require resources in different periods to be perfect substitutes when identifying the chronically poor. The authors use a general mean to combine the resources of a person into a permanent income standard that is then compared to a poverty line to determine when a person is chronically poor. The parameter of the general mean allows for varying degrees of substitutability over time, from perfect substitutes at to perfect complements as β tends to -¥. The decomposable Clark, Hemming and Ulph (1981) poverty measure with the same parameter β is applied to the distribution of permanent income standards to measure overall chronic poverty. Each measure has a convenient expression in terms of a censored matrix and satisfies a host of properties including decomposability. The authors provide an empirical application of the new measures using panel data from urban areas in Argentina.
Foster, J.; Santos, M.E. Measuring Chronic Poverty. In: Poverty and Social Exclusion: New Methods of Analysis. Routledge, (2013) ISBN 978-0-415-63634-6