New edited volume | Research on Economic Inequality: poverty, inequality and welfare.

By Sanghamitra Bandyopadhyay

Since 2014, I have coordinated and run an annual workshop on theoretical and empirical research on the analysis of poverty, inequality and mobility, generously supported by the School of Business and Management at Queen Mary University of London.

Following the 2016 workshop, several of the presented papers formed the basis for an edited volume of the journal Research on Economic Inequality (Bandyopadhyay 2018). The ten contributions address issues that are at the forefront of the discussion on how we measure poverty, inequality and welfare and how we use such measurements to devise policies to deliver social mobility. While some of the papers deal with theoretical issues that question current methods on how we measure poverty, inequality and welfare, some of them use novel techniques and datasets to investigate the dynamics of poverty and welfare, with special reference to developing countries.

Munia_Edited volume

The volume first considers some theoretical questions that are at the frontier of the measurement of poverty and welfare literature. Oded Stark, Grzegorz Kosiorowski and Marcin Jakubek’s contribution provides a thoughtful reflection on situations where a social planner may inadvertently increase income inequality in the process of increasing social welfare. They demonstrate that a Pigou-Dalton transfer which fails to decrease income inequality could imply that a more demanding transfer principle will be needed to achieve lower inequality. Gaston Yalonetzky in two separate contributions addresses the normalization of relative bipolarization indices. In the first, he deals with scale invariant bipolarization indices and characterises the existence of a benchmark of maximum relative bipolarization. In the following contribution, he highlights the problems with the use of the median in the design and implementation of relative bipolarization indices. The paper identifies that the use of the median is in fact unnecessary as it violates the basic transfer axioms of bipolarization which defines spread and clustering properties. Suman Seth with Sabina Alkire take up the concept of global multidimensional poverty and make a theoretical contribution in incorporating inequalities in deprivation across the distribution of the poor.

For time dependent analyses, tracking poverty using traditional measures, such as a headcount based measure often misses the effects of ‘churning’ – that of individuals leaving and entering the poverty zone. Natalie Quinn offers a few solutions to this problem with a novel approach. She proposes that the researcher estimates the entire trajectory of an individual’s wellbeing or experience in poverty over an extended period of time, rather than just focus on the time period in question.

The second part of the volume is a collection of empirical papers documenting the dynamics of poverty in several countries using new approaches. Sabina Alkire and Yangyang Shen explore the extent of multidimensional poverty in China using the Global Multidimensional Poverty Index with a novel dataset. Strikingly, they find a clear mismatch between households deprived in monetary and multidimensional poverty, suggesting that the monetary measures of poverty do not tell a complete story of poverty.

Joseph Deutsch, Jacques Silber and Guanghua Wan in their paper use the consumption approach for the measurement of poverty in Armenia, Azerbaijan and Georgia to observe the dynamics of poverty in the Caucasus between 2009 and 2013, using the Caucasus barometer. They investigate the process by which households may fall into poverty using asset indices, measured by the curtailment in consumption in times of stress. Romina Gambacorta focuses on the chronic nature of poverty amongst the immigrants in Italy using a novel dataset on household income and wealth.

The last two papers are empirical studies investigating the effects of inequalities on individual welfare, and on economic development. Francisco Ferreira, Deon Filmer and Nora Schady uncover inequalities in the impact of social assistance via conditional cash transfers for school enrolment in Cambodia using an intra-household allocation model. In the following paper, Roxana Gutiérrez-Romero and Luciana Méndez-Errico examine the impact of historical income inequality on the development of entrepreneurship using a unique cross country survey, the Global Entrepreneurship Monitor for 66 countries over 2005–2011, with historical data on income inequality.

The website for the 2017 workshop and its papers (with links to previous workshops) is available here.

The fifth meeting is due to be held on the 19th of October, 2018.

References

Bandyopadhyay, S (2018): Poverty, Inequality and Welfare. Research on Economic Inequality, Volume 25. Emerald Publishers, London, UK.

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