chapter  6
17 Pages

Poverty, inequality and vulnerability indices

WithStephen Morse

Poverty and vulnerability are often the two sides of the same coin. Vulnerability, or its opposite, resilience, is usually expressed in terms of an ability to withstand stresses and shocks. There are various indices of vulnerability that span environmental, social and economic stresses and shocks or indeed combinations of them. There are multiple indicators for poverty, inequality and vulnerability. The poverty line indicator that is often used is called the Headcount Ratio: The proportion of the population below the poverty line. If the mean was used then the poverty line would be pulled-up by that small proportion of higher earners. The Headcount Ratio is probably the simplest and most widely reported indicator of poverty, as it is simply the proportion of a population below a nominal poverty line. There are two fundamental ways of setting the value for the poverty line: international standard and national standard.