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This analytical tool illustrates how to define “relative” poverty lines, i.e. poverty lines based on approaches that consider the welfare position of each individual or household in relation to the welfare position of other individuals or households belonging to the same community. In particular, the module, after emphasizing the importance of the relative poverty concept in policy work, discusses two methods to define relative poverty lines: a) the “income levels” method; and b) the “income positions” method. It also shows in what these methods differ, and how they can be made operational, by means of step-by-step procedures and examples. In policy work, relativist concepts of poverty are widely [...]

This analytical tool illustrates how to define “absolute” poverty lines, i.e poverty lines based on approaches that consider the welfare position of each individual or household as if it were independent of the conditions of other individuals or households belonging to the same community. In particular, this module will discuss the following methods: the food energy intake (FEI) the cost of basic needs (CBN) the consumption insufficiency method (CI) the budget standard method (BS) The analogies and differences of the above methods will be highlighted and we shall also illustrate how they can be made operational and how they work, by means of stepby-step procedures and examples.  For more information, see [...]

This conceptual and technical paper illustrates how poverty can be defined in the context of policy impact analysis. After reporting and discussing the definition of poverty as “the lack of, or the inability to achieve, a socially acceptable standard of living”, it discusses the mono-dimensional and multi-dimensional approaches to the definition of poverty. Furthermore, the module focuses on the absolute and the relative concept of poverty, also drawing some analogies and differences with the concept of food security. A step-by-step procedure, illustrated by real case examples, is then provided to guide the reader through the process of poverty definition for [...]

This analytical tool illustrates how Crossing Generalised Lorenz (GL) curves can be used to identify the best income distribution on social welfare grounds within a set of alternative income distributions generated by different policy options. It starts by illustrating two alternative income distributions resulting from policy changes that lead to income increases for some individuals and decreases for others. GL curves are then calculated for the alternative distributions to rank them on welfare grounds on the basis of Shorrocks’ Theorem. After observing that Shorrocks’ Theorem is not applicable, because GL curves cross once, necessary additional conditions, such as restrictions on the [...]

This analytical tool illustrates how Generalised Lorenz (GL) Curves can be used to identify the best income distribution on social welfare grounds, within a set of alternative income distributions generated by different policy options, in many of the cases where ordinary Lorenz curves fail to work After illustrating some pitfalls of ordinary Lorenz Curves, a cursory presentation of the step-by-step procedure to check for Generalised Lorenz dominance and to infer welfare judgements is provided and demonstrated with some simple numerical examples. This module also points out the limitations of the GL approach whenever GL curves cross each other. In addition, it [...]

This analytical tool illustrates how Lorenz Curves can be used to identify the best income distribution on social welfare grounds, within a set of alternative income distributions generated by different policy options. After highlighting some drawbacks of using specific functional forms of the Social Welfare Function (SWF) to infer welfare judgments, the rationale for using Lorenz Curves to rank income distributions is provided in a step-by-step procedure and is illustrated with some simple numerical examples. This module also points out the limitations of Lorenz dominance and highlights how, in some circumstances, it is necessary to use Generalised Lorenz (GL) Curves. Generalised [...]

This analytical tool explains how to build Lorenz Curves for income distributions and discusses their use for inequality measurement. A short conceptual background, a step-by-step procedure and a simple numerical example illustrate how to calculate and draw Lorenz Curves. A discussion on the use of Lorenz Curves to represent inequality is also provided. It highlights that the Lorenz Curve is one of the most used ways of representing income distributions in empirical works thanks to its immediate comparability with a “natural” benchmark, the Equidistribution line, representing the most egalitarian distribution. The concepts of Lorenz dominance and intersection of Lorenz Curves [...]

The AIDS epidemic is challenging all aspects of the development agenda. Many of the premises on which development interventions are based are no longer relevant. The disease has decimated sub-Saharan Africa's agricultural labour force and will continue to do so for generations, depleting the region of its food producers and farmers. Not only is the epidemic causing severe reversals in development gains, but it is making ‘typical’ development interventions impractical. Communities’ livelihoods are being permanently eroded and assets depleted with the reoccurring periods of sickness and death that the epidemic brings. Labour, a much valued human asset and the foundation of [...]