How robust is a poverty profile

Comparisons of poverty, such as where or when poverty is greatest, typically matter far more for policy choices than do aggregate measures of poverty, such as how many people are deemed poor. We examine alternative methods for constructing poverty profiles, focusing on their internal consistency and appropriateness for guiding policy. None is perfect, but some methods appear to be preferable to others when the aim is to inform policies for fighting absolute-consumption poverty. A case study on Indonesia reveals that the country's regional and sectoral poverty profile is highly sensitive to some aspects of measurement but quite robust to others. When practices in empirical work have a bearing on policy choices, they deserve especially close scrutiny. Constructing a poverty profile showing how the extent of poverty varies across subgroups of a population is typically the first step in formulating an antipoverty policy. Do the assumptions made matter to the policies advocated? This article critically examines popular methods of constructing a poverty profile. We discuss the strengths and weaknesses of the two most common methods of setting poverty lines. Although neither is perfect, we argue that one of these methods is preferable when the poverty profile is intended to inform policies aimed at reducing absolute poverty. Regional and employment profiles of poverty in Indonesia for 1990 are con-structed by alternative methods to test the robustness of die poverty profile to the assumptions made. Section I discusses die alternative approaches in the abstract. Section II then describes die approach we have adopted as the benchmark for comparison purposes. The empirical results for Indonesia are discussed in section in. Our conclusions are summarized in section IV. I. Two STANDARD APPROACHES TO CONSTRUCTING A POVERTY PROFILE A poverty profile shows how a measure of poverty varies across subgroups of a population, such as region of residence or sector of employment. Typically,