Inter-Country Comparisons of Poverty Based on a Capability Approach
33 Pages Posted: 17 Jul 2006 Last revised: 14 Aug 2014
We argue that inter-country comparisons of income poverty based on poverty lines uniformly reflecting the costs of the basic requirements of human beings are superior to the existing money-metric approaches. In this exercise, we implement a uniform approach to poverty assessment based on basic human capabilities for three countries: Nicaragua, Tanzania, and Vietnam. We compute standard errors of the resulting poverty estimates and compare the incidence of poverty across these three countries. The choice of approach affects both cardinal estimates and ordinal rankings of poverty across countries and over time. Meaningful and coherent inter-country poverty comparisons can be advanced through international co-ordination in survey design and in the construction of income poverty lines that uniformly reflect the costs of the basic requirements of human beings.
Keywords: Poverty, Poverty Measurement, Capabilities, Functionings, International Comparisons, Intersection Partial Orderings, Hasse Diagrams, Tanzania, Nicaragua, Vietnam
JEL Classification: C12, C43, C81, D31, D63, I30, I31, I32, O12, O15
Suggested Citation: Suggested Citation