Annual Forum Papers

Conceptual and Measurement Issues in Poverty Analysis

  • Year: 2003
  • Author(s): Erik Thorbecke

Our understanding of the concept of poverty has improved and deepened considerably in the last three decades or so following Amartya Sen's seminal work. We possess presently the analytical tools to identify and locate the poor, to describe their characteristics and to measure the extent of poverty at different levels of aggregation. Yet, in spite of spectacular methodological advances in the analysis of poverty a number of conceptual and measurement issues remains to be addressed or further clarified. Ravi Kanbur (2002) has argued that the research on distributional issues in economics and development economics in the last thirty years can be divided roughly into two periods the 1970's to the mid 1980's and the mid-1980's to the end of the last century. The first fifteen years were a period of great conceptual leaps and ferment while the second fifteen years were marked by consolidation, application and fierce policy debate. Very recent methodological contributions suggest that we are entering a period of resurgence in research attempting to sharpen and broaden our view of poverty.

The objective of this paper is to review a number of issues related to poverty, while taking stock of the ongoing research. Most of the remaining unresolved issues in poverty analysis are related directly or indirectly to the dynamics of poverty. Before the development community can become more successful in designing and implementing poverty-alleviation strategies, within the context of growth, we need to understand better the conditions under which some households remain permanently (chronically) poor and how others move in and out of poverty. In what follows we review the state of the art under a number of interrelated headings: 1) Chronic vs. transient poverty; 2) Poverty and vulnerability; 3) The determination of the poverty line across time and countries; 4) The quantitative vs. qualitative approach to poverty measurement; and 5) Growth, inequality and poverty.