Irrelevance of the $1‐a‐Day Poverty Line
This chapter argues that whether an individual is deemed poor depends not only on that individual's economic and non-economic endowments but also, equally, the place of that individual in the socio-economic-political processes of the country of which he or she is a citizen. For this reason any meaningful indicator that distinguishes the poor from non-poor has to be multidimensional. Any indicator of poverty could serve three distinct purposes: (i) a positive one of depicting the extent of poverty, the socio-economic profile of the poor, at one or more points of a time, in some well defined unit (e.g., nation state or units within a nation, or aggregates of nations such as low income countries), with the depiction providing a yardstick both for monitoring the performance in poverty reduction of national governments and international agencies and also for an analysis of determinants of poverty; (ii) a normative one as an input into policy formulation; and (iii) for mobilization of support among citizens, media, and governments for the objective of and policies for poverty alleviation and for policies. However, given the formidable problems in conceptualizing and measuring poverty and the tremendous heterogeneity among the poor — however conceptualized — within and across societies, any uni-dimensional indicator such as the $1 a day poverty line popularized by the World Bank is meaningless and completely irrelevant. At best one can hope to construct a comprehensive multidimensional poverty indicator for relatively homogeneous groups recognizing the unavoidable arbitrariness in doing so. Some tentative ideas for such an indicator are provided.
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