An Econometric Approach to the Measurement of Poverty

This paper presents a method for specifying and measuring poverty d efined as relative deprivation. The authors base their measure of an individual's poverty on the distance between his/her consumption experience and the social norm. Consumption experience is defined in terms of events, and the modal frequency of an event in the community defines the norm. Aggregation over events is made to capture the objective, as well as subjective, nature of deprivation. The authors' measure is related to that proposed by Peter Townsend and econometri c estimation is carried out using the Townsend data. Income is found to be neither the sole nor the most important indicator of deprivation.