Poverty and Inequality Measurement

Aims of the chapter

To introduce the concepts of poverty and inequality.

To familiarize readers with the key measures of monetary poverty and inequality.

To present key multi-dimensional measures of poverty.

To raise awareness of the importance of measurement tools as well as of their underlying concepts for policy use.

Key Points

Poverty and inequality can be considered in different spaces: incomes, resources or functionings.

Poverty measures (a) choose the space for analysis, (b) identify which people are poor and (c) summarize a society’s poverty status in an aggregate number.

Inequality measures (a) choose the space for analysis, (b) consider the entire distribution of people, from poorest to richest, (c) summarize the inequality of the distribution in a single number.