Aspects of Poverty in Malaysia

This paper is concerned with the definition and measurement of poverty in Malaysia. A poverty line is estimated after considering both the absolute and relative approaches to the definition. Various indices of poverty are discussed, ranging from the simple “incidence of poverty” measure to others which take account of the “poverty gap”. There is a derivation of a new index due to Sen, and alternative normalizations are suggested for it. Estimates of all these measures are presented for Malaysia. Finally, the simple “incidence of poverty” measure, which is decomposable, is adopted to construct a “profile” of the poor in Malaysia.