CHAPTER XI INCOME LEVELS, DISTRIBUTION AND POVERTY

XI.1 The assessment of poverty XI.2 Ways of measuring the incidence of poverty among households  XI.2.1 Low-income rate (Cumulative proportions below percentiles of the median)  XI.2.2 The low income gap  XI.2.3 Relative income level by percentile  XI.2.4 Cumulative decile shares – Lorenz curve  XI.2.5 Gini coefficient  XI.2.6 Sen index  XI.2.7 Warning in the interpretation of coefficients XI.3 Poverty lines and inequality measures in practice in agriculture

XI.1The assessment of poverty Deprivation is a multi-dimensional concept Income deprivation is one aspect A poverty line (boundary) can be a useful tool when looking at the problem of low incomes in agriculture Distinction between short-term low incomes and persistent low incomes in agriculture

IX.2 Ways of measuring the incidence of poverty among households XI.2.1 Low-income rate (Cumulative proportions below percentiles of the median)  XI.2.2 The low income gap XI.2.3 Relative income level by percentile XI.2.4 Cumulative decile shares – Lorenz curve XI.2.5 Gini coefficient XI.2.6 Sen index XI.2.7 Warning in the interpretation of coefficients  2-point trends / business cycle effects / mixed datasets

XI.3 Poverty lines and inequality measures in practice in agriculture Absolutist and relative poverty lines All poverty lines are ultimately political choices Danger of using too narrow an income base Easier to use in stable conditions (income averaging for agriculture?) Few countries have analysed distributions of farm household incomes, and poverty lines rare (US figures published regularly)

Recommendation This Handbook recommends the calculation of the basic statistical characteristics of the distribution of incomes of agricultural households, including medians and quartiles, and measures of inequality and of poverty based on them.

Recommendation The use of poverty lines is encouraged, with comparisons drawn over time, geographically and between agricultural households (variously defined) and other socio-professional group, suitable attention being given to hazards in these comparison. At present no particular methodology is preferred, though accounts of the method used should be readily available.