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Rethinking relative measures of poverty

National Research and Development Centre for Welfare and Health (STAKES), Helsinki, Finland

Heikki Hiilamo

Church Council/Diakonia & Social Responsibility (KDY), PO Box 185, 00161 Helsinki, Finland heikki.hiilamo{at}evl.fi

Reijo Sund

National Research and Development Centre for Welfare and Health (STAKES), Helsinki, Finland

This paper attempts to develop an alternative measure for relative poverty. The aim is to combine information both on the depth of poverty and the number of people living in poverty. We seek, moreover, to establish a yardstick that would be relatively simple and easy to understand, so as to facilitate the use of such a new method in sociological poverty research and political decision making. The Cumulative Poverty Index (CUPI) indicates how many times poorer on average the poor households are, compared to all households on average (or the other way round: the ratio of the mean income of poor households to the mean income of all households). The empirical analysis demonstrates that CUPI seem to reflect changes in the incomes of the poor more accurately than do head-count ratios based on median income.

Key Words: poverty and inequality • poverty measurement

Journal of European Social Policy, Vol. 16, No. 2, 107-120 (2006)
DOI: 10.1177/0958928706062500


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