Traditional Poverty Approach Sample Clauses

Traditional Poverty Approach. The traditional poverty approach is characterized by a simple dichotomization of the population into poor and non poor defined in relation to some chosen poverty line that represents a percentage (generally 50%, 60% or 70%) of the media or the median of the equivalent income1 distribution. This approach is unidimensional, that is, it refers to only one proxy of poverty, namely low income or consumption expenditure. The traditional poverty method takes place in two different and successive stages: the first aims to identify who is poor and who is not according to whether a person’s income is below a critical threshold, the poverty line; the second stage consists of summarising the amount of poverty in aggregate indices that are defined in relation to the income of the poor and the poverty line. We can distinguish between poverty measures and inequality measures as discussed below. Poverty measures are used first and foremost for monitoring social and economic conditions and for providing benchmarks of progress or failure. They are indicators by which policy results are judged and by which the impact of events can be weighed, then they need to be trusted and require rigorous underpinning. They depend on the average level of consumption or income in a country and the distribution of income or consumption, then they focus on the situation of those individuals or households at the bottom of the distribution. The measures will function well as long as everyone agrees that when poverty numbers rise, conditions have indeed worsened and conversely, when poverty measures fall, that progress has been made. Poverty measures must satisfy a given set of axioms or must have certain characteristics: 1 The equivalent income of a household is obtained by dividing its total disposable income by the household’s equivalised size computed by using an equivalent scale which takes into account the actual size and composition of the household. 1. Scale invariance: poverty measures should be unchanged if, for example, a population doubles in size while everything else is maintained in the same proportions; 2. Focus axiom: changes among better-off people below the poverty line do not affect measured poverty; 3. Monotonicity axiom: holding all else constant, when a poor person’s consumption or income falls, poverty measures must rise or at least should not fall; 4. Transfer axiom (Xxxxx-Xxxxxx principle): holding all else constant, taking money from a poor person and giving it to a l...