Thesia I. Garner and Kathleen Short (2005) "Developing
a New Poverty Line for the USA: Are There Lessons for India?".
This paper reviews a procedure that is being followed in the United States of America
(USA) to experimentally test and evaluate recommendations made for
redefining poverty measurement in that country. The recommendations were
made in 1995 by the US National Academy of Sciences (NAS) Panel on poverty
measurement. In this paper these recommendations are reviewed and the
impact of implementing the recommendations on measures of inequality and
poverty are examined. In conclusion, a discussion concerning possible
lessons for India is provided.
The recommended poverty measure (based on new measures of thresholds and resources) is
examined in terms of its impact on inequality statistics, as well as
poverty statistics, and results are compared to similar statistics based
on the official measure. The standard Gini index, and three generalized
entropy inequality measures are used to examine inequality. For the
poverty analysis simple head count ratios, poverty gaps, and Foster-Greer-Thorbecke
poverty measures are computed. Data from the 1991 U.S. Consumer
Expenditure Survey (CE) Interview are used to produce the thresholds, and
data from the 1992 through 1997 Current Population Survey (CPS), and in
some analyzes, the 1991 panel of the Survey of Income and Program
Participation (SIPP), are used to define resources.
The proposed measure produces a distribution of resources that is, in general, more equal than is the
distribution of official income. The poverty analysis reveals that
changes in the poverty rates based on the official and the experimental
measures are similar over time. However, poverty as measured by the NAS
measure is greater than official poverty. The experimental poverty
measure yields a poverty population that looks slightly more like the
total U.S. population in terms of various demographic and socioeconomic
characteristics than does the current official measure. Geographically
adjusting the thresholds results in greater equality and lower poverty
rates than when non-adjusted thresholds are used.
With regard to India, poverty measurement is likely not to be based on
income and expenditures primarily. Alternative measures based on other
needs and resources are reviewed. However, regardless of the measure
used, systematic evaluations of the measure are necessary and the USA
model may be one to consider in this evaluation process.
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