IDENTIFYING THE POOR: A COMPARISON OF INCOME AND EXPENDITURE INDICATORS USING THE 1985 FAMILY EXPENDITURE SURVEY
| Author | Dilip Nachane,Pat McGregor |
| DOI | http://doi.org/10.1111/j.1468-0084.1995.tb00030.x |
| Published date | 01 February 1995 |
| Date | 01 February 1995 |
OXFORD
BULLETIN
OF
ECONOMICS
AND
STATISTICS,
57,
I
(1995)
0305-9049
IDENTIFYING
TKE
POOR:
A
COMPARISON
OF
INCOME
AND
EXPENDITURE
INDICATORS
USING
THE
1985
FAMILY
EXPENDITURE
SURVEY
Pat
McGregor and
Dilip
Nuchanet
I,
INTRODUCTION
Any analysis
of
the characteristics of the poor which
is
clearly required to
formulate a policy
to
counter poverty, has
as
a
prerequisite their identifica-
tion. Poverty has many dimensions which have been explored, for instance,
in
the
work
of
Townsend
(1
979)
and Desai and Shah
(
1988).
The mainstream
of
research has used a more humdrum approach where an individual has been
classified as poor
if
a
scalar measure of
his
or
her welfare
does
not
exceed a
value that
is
specified
a
priori.
The standard
of
living constitutes a direct measure
of
welfare defined
in
terms
of
intrinsic goods such
as
consumption
or
quality of life and reflects a
concept
of
poverty which
is
based upon outcomes.
In
contrast
to
this the
entitlement approach considers
an
individual's participation in society
as
being
conditional upon having a minimum level
of
resources. Thus the choice
of
indicator may
be
determined
by
the concept
of
poverty employed though,
as
pointed out
by
Ringen
(1988),
such consistency
is
rarely apparent
in
the
literature.
Clearly
an
expenditure based indicator accords
most
closely with the
standard
of
living
concept
of
welfare, whereas income
and
enritlement are
more consonant. However, in this paper we
will
treat income and expenditure
as
Simply alternative mmUreS of household welfare. The theoretical
assump-
tions required
to
make either income
or
consumption
a
superior indicator are
restrictive (Blundel] and Preston,
I99
1
)
so
assessing their
performance becomes a matter
of
setting Up pragmatic empifical-based
Procedures,
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