Measuring Poverty Without The Mortality Paradox

Mathieu Lefebvre (1) , Pierre Pestieau (1, 2, 3, 4, 5) , Grégory Ponthière (2, 3)

1 CREPP - Center of Research in Public Economics and Population Economics
2 PSE - Paris-Jourdan Sciences Economiques
3 PSE - Paris School of Economics
4 CORE - Center of Operation Research and Econometrics [Louvain]
5 CEPR - Center for Economic Policy Research

Under income-differentiated mortality, poverty measures reflect not only the "true" poverty, but, also, the interferences or noise caused by the survival process at work. Such interferences lead to the Mortality Paradox: the worse the survival conditions of the poor are, the lower the measured poverty is. We examine several solutions to avoid that paradox. We identify conditions under which the extension, by means of a fictitious income, of lifetime income profiles of the prematurely dead neutralizes the noise due to differential mortality. Then, to account not only for the "missing" poor, but, also, for the "hidden" poverty (premature death), we use, as a fictitious income, the welfare-neutral income, making indifferent between life continuation and death. The robustness of poverty measures to the extension technique is illustrated with regional Belgian data.

Mots clés: premature mortality; income-differentiated mortality; poverty measurement; censored income profile

Domaines: Economies et finances

Mathieu Lefebvre, Pierre Pestieau, Grégory Ponthière. Measuring Poverty Without The Mortality Paradox. 2011. ⟨halshs-00622325⟩