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Inequality and Poverty

we often need equivalence scales to convert

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Unformatted text preview: depending on who sets them Relative: (example: bottom 10% of the income distribution) Issues in setting an absolute poverty line: Decide how to measure standard of living What is a “minimally acceptable” level? Should this be the same everywhere and all the time? Or should it rise as a society gets wealthier. Referencing problem (what is a “baseline” level of utility)? Identification problem? Households or individuals? Which equivalence scales? Poverty lines can be drawn based on culture, social norms, etc. (EVERY COUNTRY IS FREE TO DO IT ANYWAY IT WANTS) Once we have a poverty line, have to identify people “below” the line Da...
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