Title:
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Measuring poverty over time : a formal analysis
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The problem addressed in this D.Phil. thesis is the aggregation of welfare data
across individuals and over time, in particular to construct measures of poverty which
reflect an ethical poverty analyst.'s normative judgements regarding trajectories of
wellbeing experienced by individuals in a society. The motivation' for the analysis is
the provision of tools useful for the evaluation of poverty alleviation policies.
Specification of appropriate assumptions concerning the information available to
the poverty analyst and weak restrictions to her method of evaluation create a frame-
work in which the consequences of normative judgements may be elucidat.ed. In this
process some well known results in micro economic theory are generalised, rendering
them applicable to the domain of analysis. Weak consistency properties together with
anonymity are shown to restrict the class of available poverty measures to those which
induce a well-defined ordering of the space of wellbeing trajectories.
Particular properties of the trajectory ordering are motivated and imposed to de-
velop a new class of int.ertemporal poverty measures which permit less intertemporal
compensation of wellbeing as depth of poverty increases. It is shown that. this property
precludes pure duration-sensitivity, making the intertemporal poverty measures pro-
posed inapplicable to the measurement of chronic poverty. It is shown also that there
exists a conflict between reasonable assumptions about intertemporal preferences and
the measurement of chronicity or persistence of poverty, with the consequence that
many recently suggested 'chronic poverty measures' are in fact insensitive to chronicity
of poverty.
A different measure is proposed, with properties which render it applicable to
the measurement of chronic poverty. Imposing equivalence of the two measures for
constant-wellbeing trajectories permits decomposition into chronic and transient com-
ponents. These measures are applied to the analysis of poverty in rural Ethiopia in
the period 1994-2004.
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