Book Chapter Inequality and Poverty Re-Examined Ch. 1
New directions in the analysis of inequality and poverty
Over the last four decades, academic and wider public interest in inequality and poverty has grown substantially. In this paper we address the question: what have been the major new directions in the analysis of inequality and poverty over the last thirty to forty years? We draw attention to developments under seven headings.
First, analysis has changed because the context has changed. The picture of inequality and poverty in different parts of the world is not the same as it was in the 1970s. There were notable changes in the shape of the income distribution in many, but not all, western developed nations. A second development has been major changes in the policy environment in both industrialised and developing countries. Third, the concepts of inequality and poverty have themselves come under scrutiny. Dissatisfaction has been expressed with conventional approaches to inequality and poverty, and this has led to multidimensional approaches to measurement, in both rich and poor countries alike.
Fourth, forty years ago most perspectives on the income distribution were derived from cross-sectional data - whether a series of snapshots over time for a particular country or snapshots for a number of countries. But today this approach has been supplemented in a major way by longitudinal perspectives. A fifth development since the early 1970s, and one that underpins the developments cited so far, concerns data. The quantity and quality of data to analyse distributional issues have both increased substantially.
Sixth, there have been substantial developments in analytical methods of measurement: the stochastic dominance approach to analysis of income distributions that is now ubiquitous, and the systematic derivation of classes of parametric summary indices with explicit properties. Seventh, there has also been immense cross-fertilization between inequality measurement and the measurement of social welfare, poverty and mobility. Seventh, there have been significant developments in the modelling of income distribution, from theoretical and empirical perspectives, including microsimulation.
Volume and page numbers
3-36 , 3 -33
by Stephen P. Jenkins and John Mickelwright (eds.)