CHAPTER XI INCOME LEVELS, DISTRIBUTION AND POVERTY

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CHAPTER XI INCOME LEVELS, DISTRIBUTION AND
POVERTY
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• XI.1 The assessment of poverty
• XI.2 Ways of measuring the incidence of poverty
  among households
• XI.2.1 Low-income rate (Cumulative proportions
  below percentiles of the median)
• XI.2.2 The low income gap
• XI.2.3 Relative income level by percentile
• XI.2.4 Cumulative decile shares Lorenz curve
• XI.2.5 Gini coefficient
• XI.2.6 Sen index
• XI.2.7 Warning in the interpretation of
  coefficients
• XI.3 Poverty lines and inequality measures in
  practice in agriculture

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XI.1 The assessment of poverty

• Deprivation is a multi-dimensional concept
• Income deprivation is one aspect
• A poverty line (boundary) can be a useful tool
  when looking at the problem of low incomes in
  agriculture
• Distinction between short-term low incomes and
  persistent low incomes in agriculture

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IX.2 Ways of measuring the incidence of poverty
among households

• XI.2.1 Low-income rate (Cumulative proportions
  below percentiles of the median)
• XI.2.2 The low income gap
• XI.2.3 Relative income level by percentile
• XI.2.4 Cumulative decile shares Lorenz curve
• XI.2.5 Gini coefficient
• XI.2.6 Sen index
• XI.2.7 Warning in the interpretation of
  coefficients
• 2-point trends / business cycle effects / mixed
  datasets

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XI.3 Poverty lines and inequality measures in
practice in agriculture

• Absolutist and relative poverty lines
• All poverty lines are ultimately political
  choices
• Danger of using too narrow an income base
• Easier to use in stable conditions (income
  averaging for agriculture?)
• Few countries have analysed distributions of farm
  household incomes, and poverty lines rare (US
  figures published regularly)

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Recommendation

• This Handbook recommends the calculation of the
  basic statistical characteristics of the
  distribution of incomes of agricultural
  households, including medians and quartiles, and
  measures of inequality and of poverty based on
  them.

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Recommendation

• The use of poverty lines is encouraged, with
  comparisons drawn over time, geographically and
  between agricultural households (variously
  defined) and other socio-professional group,
  suitable attention being given to hazards in
  these comparison. At present no particular
  methodology is preferred, though accounts of the
  method used should be readily available.