Distinguishing between individual‐and household‐level poverty

Drawing on survey data from 1995, this article shows that the level of aggregation is an important component in the analysis of poverty. Utilising the Headcount Index and cumulative distribution functions, the article examines earnings among individuals and households. Specifically, it is shown that poverty measures at the individual level, compared with estimates at the household level, will transmit differential rankings of indigence. Both are important predictors of poverty and hence should be coupled when trying to understand low earnings in a society.

Notes

Senior Reseacher, Development Policy Research Unit, School of Economics, University of Cape Town.