ABSTRACT
This chapter focuses on the positive analysis of poverty. It focuses on the choice of a monetary indicator of wellbeing that can be used to characterize poverty, agree on a threshold level for this indicator, called a poverty line, below which people will be called poor, and develop a number of poverty indicators that measure various aspects of poverty in a population. Using household survey data, the chapter identifies the households in poverty and obtain a description of the poor. There are two monetary indicators one could use to measure an individual’s level of wellbeing at a particular point of time: income per capita or consumption expenditures per capita. Information on income and consumption expenditures is typically collected through household surveys. Consumption expenditure is measured at the household level. This is mostly because the household is the unit of decision-making for purchases of consumer goods and for the production of z-goods. Poverty takes on specific forms, such as hunger.
