Head Count

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The Head Count poverty measurement, also referred to as the "headcount index", is the proportion of the population which is considered poor. It is calculated by dividing the number of poor people by the total population.

Problems with Headcount Poverty Measurement

The best part of the headcount poverty measure is that it is simple to construct and easy to understand. However, it does have its drawbacks. The headcount measure doesn't take into account the intensity of poverty. Two countries could have the same headcount poverty rate,but the inequality in the countries can be vastly different. Second, the headcount poverty rate does not indicate how poor the poor are. Therefore a country can lower its headcount rate just by giving benefits to those closest to the poverty line because they are cheapest to move across the line. Third, the poverty estimates should be calculated for individuals and not households. One poor household could consist of more individuals than a smaller rich family, yet they are counted as the same. [1]

Possible Solutions

Given the many drawbacks of the headcount ratio, here are few poverty measurements that can be used instead:

Both of these give more weight depending on how poor an individual is. These two methods are not used by politicians much, because, as it was mentioned before, it looks better if you can give a small amount of money to a person just below the poverty line to get them out of poverty and reduce your country's poverty rate without really solving the problem.

References

  1. [1], "Measures Of Poverty". Retrieved April 24, 2012.
  2. http://esl.jrc.it/envind/un_meths/UN_ME013.htm
  3. http://esl.jrc.it/envind/un_meths/UN_ME014.htm
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