ABSTRACT
This chapter analyses the various theoretical and methodological problems causing the lack of consensus on poverty measurement. It deals with the identification of poverty and the aggregation of poverty across individuals. The chapter concentrates on the various methods applied to identify poverty at the household level. It reviews empirical studies in which the composition and size of the population of poor is compared, using different definitions of poverty. It is seen that both in the identification and in the aggregation stage, some welfare judgments are made, either explicitly or implicitly. The chapter discusses the advantages and disadvantages of a number of poverty definitions. It reviews empirical studies in which the composition and size of the population of poor is compared, using different definitions of poverty. Although welfare is theoretically the best basis for a poverty line definition, in practice both the measurement problems and the essentially subjective nature of welfare cause a new set of problems.
