Indicators of Inequality and Poverty

In this chapter we shall take a rapid overview of certain salient issues in the measurement of inequality and poverty — two major sources of social ‘illfare’. While the intention is to assign each of the two topics the same importance, this may not be reflected in the final outcome (which seems somewhat to favour ‘poverty’ over ‘inequality’) when judged according to the amount of space allocated to the two topics: the space-allocation pattern, it must be clarified, is largely a function of the expository demands — as they have seemed to present themselves — confronting the author. Both subjects are immensely vast, and built on foundations of considerable philosophical and conceptual import which, however, we shall have little space to review here. The best one can do is to point the interested reader toward Sen’s (1981a, 1992) assessments of the conceptual underpinnings of the notions of poverty and inequality respectively. Our own concerns here will be restricted to issues in measurement , and that, principally though certainly not exclusively, in the space of incomes . This is not so much because of any underlying view to the effect that income is the most relevant dimension in which to measure inequality and poverty, as because this chapter is primarily a survey of the literature; and the literature on inequality and poverty has, as it happens, concerned itself very largely with measurement in the income dimension. These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.