A Comparative Study on Three Poverty Measures

This paper examines three poverty measures which can be utilized for poverty comparison or policy research. In terms of policy research, whether or how a specific policy affects poverty may depend on the particular way in which poverty is measured. Poverty measures will also determine the picture of poverty comparison among groups. However, past studies on poverty still adopt income or poverty rate as virtually the only indicator of poverty, which suggests that they have done little to publicize other dimensions of poverty. This limitation may also distort the public perception of poverty or social policies. Given these conditions, this paper investigates three poverty measures, which include poverty rate, the poverty gap and the squared poverty gap. These three measures would yield more comprehensive pictures of poverty by measuring different dimensions of poverty. This paper also presents statistical findings which are obtained from the March Current Population Survey data. The implications of this study would be that it is not safe to rely on a limited measure of poverty. Multiangulating results obtained by using multiple poverty measures will be a more secure basis for drawing conclusions than using single dimensions, especially in poverty comparison or policy research area.