What are the measures of poverty?

This way of measuring poverty includes the consideration that expenditure on food in households is a constant proportion of total expenditure. The poverty line is fixed by multiplying the value of the basic food products by the reverse of the proportion that food expenditure signifies for total expenditure.

What is Sen’s poverty index?

The Sen index (S) is defined by the combination of three distinct measures of poverty: the poverty rate ( ); the poverty gap ratio ( ); and the inequality of incomes among the poor as measured by the Gini index ( ) (Sen 1976. 1976. “Poverty: An Ordinal Approach to Measurement.” Econometrica 44: 219–231.

How is the poverty gap calculated?

The poverty gap is the ratio by which the mean income of the poor falls below the poverty line. The poverty line is defined as half the median household income of the total population.

What is squared poverty gap?

FGT(2), or the Squared Poverty Gap Index, measures the severity of poverty for each area. By squaring the poverty gap for each household/individual, this measure gives greater weight to those that fall far below the poverty line than those that are closer to it.

What are the 4 different measures of poverty?

Official Poverty Measure

  • Earnings.
  • Unemployment and workers’ compensation.
  • Social Security.
  • Supplemental Security Income.
  • Public assistance.
  • Veterans’ payments.
  • Pension or retirement income.
  • Interest.

How does Amartya Sen describe poverty?

Amartya Sen (1983), on the other hand, emphasized that poverty is not just relative, but also absolute. He defined poverty as a failure to achieve certain minimum capabilities and, according to him, the lack of capabilities is absolute.

What is head index index and poverty gap?

The poverty gap index is an improvement over the poverty measure head count ratio which simply counts all the people below a poverty line, in a given population, and considers them equally poor. Poverty gap index estimates the depth of poverty by considering how far, on the average, the poor are from that poverty line.

How is inequality measured?

Gini index It is the most widely cited measure of inequality; it measures the extent to which the distribution within an economy deviates from a perfectly equal distribution. The index is computed as the ratio of the area between the two curves (Lorenz curve and 45-degree line) to the area beneath the 45-degree line.

What does the multidimensional poverty index measure?

The global Multidimensional Poverty Index (MPI) is an international measure of acute multidimensional poverty covering over 100 developing countries. It complements traditional monetary poverty measures by capturing the acute deprivations in health, education, and living standards that a person faces simultaneously.