A New Approach to Decomposing Poverty Changes in China

摘要

Variations in aggregate poverty indices can be due to three components. This paper uses a general cost-of-inequality approach that decomposes the total change in poverty into a sum of indices of each of the three components. This decomposition can also serve to integrate horizontal and vertical equity measures in the poverty alleviation assessment of social and economic programs. Then, we use these measures to briefly illustrate Chinese poverty changes in 2005.