ASSET-BASED POVERTY MEASUREMENT: THEORY AND PRACTICE OF INDICATOR USAGE
Journal Title: Держава та регіони. Серія: Економіка та підприємництво - Year 2018, Vol 4, Issue 103
Abstract
The article is devoted to the topic of monetary indicators for poverty measurement, to be more precise – asset-based measurement of poverty. When it comes to identification of poverty based on asset criterion, the main question for the researchers is whether households have sufficient amount of assets that can be used if income drops significantly or is not received by household members during a short period of time. Income reduction can occur in case of health problems, experienced by the household head, war conflict or job loss due to the recession. In all mentioned situations, assets can be a safety cushion for households, helping them to support the level of consumption that covers basic needs and preventing downward mobility. Another question in focus when poverty is measured by asset indicator is the identification of a time needed for households to escape from poverty trap and how much they should save to do it (as savings is one of the main types of assets). It should be noted, that according to the research results, not only top income deciles representatives save – poor can also save money and it can be a way for them to move to lower middle-income class. In this article, the concept of poverty by assets was defined as an absence of financial and non-financial assets that can be used by households for financing consumption in the period of significant income drop or absence of income. The author showed the advantages of usage of assets-based poverty criterion in combination with the criterion of poverty by income by summing up the results of studies, in which mixed approach (assets and income) to poverty measurement was used. Additionally, the author described the main pros and cons of usage of assets-based poverty criterion for social policy construction and implementation and the main problems of measuring poverty by asset criterion in Ukraine.
Authors and Affiliations
A. V. Veremchuk
Keywords
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