A simple method for controlling for compositional effects in the measurement of poverty

Abstract

This paper outlines a method for controlling for compositional factors in the measurement of poverty. The method is based in shift-share analysis and direct standarization, the later technique popular in the field of demography. The method is consistent with Sen's influential axiomatic approach to poverty measurement and employs the popular poverty index proposed by Foster et al. This index is one of the few summary poverty measures that can be directly standardized and also meets Sen's criteria.