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Clarifying poverty decomposition


Muller, A (2008). Clarifying poverty decomposition. In: Frontiers of Poverty Analysis, Helsinki, 26 September 2008 - 27 September 2008.

Abstract

I discuss how poverty decomposition methods relate to integral approximation, which is the foundation of decomposition of the temporal change of a quantity into key drivers. This offers a common framework for the different decomposition methods used in the literature, claries their often somewhat unclear theoretical underpinning and
identifes the methods'shortcomings. In light of integral approximation, many methods actually lack a sound theoretical basis and they usually have an ad-hoc character in assigning the residual terms to the different key
effects. I illustrate these claims for the Shapley-value decomposition and methods related to the Datt-Ravallion
approach and point out difficulties in axiomatic approaches to poverty decomposition. Recent developments in energy and pollutant decomposition offer some promising methods, but ultimately, further development of poverty decomposition should account for the basis in integral approximation.

I discuss how poverty decomposition methods relate to integral approximation, which is the foundation of decomposition of the temporal change of a quantity into key drivers. This offers a common framework for the different decomposition methods used in the literature, claries their often somewhat unclear theoretical underpinning and
identifes the methods'shortcomings. In light of integral approximation, many methods actually lack a sound theoretical basis and they usually have an ad-hoc character in assigning the residual terms to the different key
effects. I illustrate these claims for the Shapley-value decomposition and methods related to the Datt-Ravallion
approach and point out difficulties in axiomatic approaches to poverty decomposition. Recent developments in energy and pollutant decomposition offer some promising methods, but ultimately, further development of poverty decomposition should account for the basis in integral approximation.

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Additional indexing

Item Type:Conference or Workshop Item (Paper), refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Language:English
Event End Date:27 September 2008
Deposited On:05 Dec 2008 07:37
Last Modified:05 Apr 2016 12:34
Funders:UNU-WIDER
Additional Information:Also: Poster session, Third Annual Conference of the Verein für Socialpolitik, Research Committee Development Economics, May 30-31, 2008, Zurich, Switzerland
Official URL:http://www.wider.unu.edu/events/2008-conferences/frontiers/en_GB/frontiers-of-poverty-analysis/
Permanent URL: http://doi.org/10.5167/uzh-5626

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