Measuring Chronic Non-Income Poverty

Abstract

Based on Amartya Sen’s groundbreaking work on capabilities and functionings, static poverty measures have long used non-income indicators. In contrast, measures of poverty dynamics, including chronic poverty, have in general conceptualized poverty only in an income dimension. Hence, this paper first critically discusses the conceptual and empirical potentials as well as the limitations of analysing chronic poverty from a non-income perspective. Second, it proposes methods to empirically measure chronic non-income poverty, with an exploratory application to panel data from Vietnam from 1992 and 1997, and demonstrates that a range of useful insights can be generated from such an analysis. In particular, we find that the correlation between chronic income and non-income poverty is rather low. This is mostly due to a low correlation between income and non-income poverty in each period, while both move relatively closely over time. We also find a surprising amount of heterogeneity in static and dynamic non-income poverty within households. However, our analysis also shows that longer panel data with more comprehensive information on non-income dimensions of wellbeing would be needed.

Keywords: intergenerational transmission of poverty, data, USA, south-north