Poverty Gap Index

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The Poverty Gap Index measures the amount of people living under the poverty line using the Head Count Ratio, by multiplying it by the mean shortfall consumption from the poverty line. This means that someone who falls just below the poverty line is counted for less than someone who is much farther below it. [1]

This method of analyzing poverty is an improvement over the Head Count ratio. The Poverty Gap Index takes into account the degree of poverty people experience when they are below the poverty line, rather than clumping all of these individuals together and labeling them as poor. There are some individuals who are almost above the poverty line, while there are those who are far below it. When using the Poverty Gap Index measure, identifying the most poor and applying aid to those first will be the most effective way to combat poverty.


Example of a Poverty Gap

Gap.gif

[2]

references

  1. http://esl.jrc.it/envind/un_meths/UN_ME013.htm
  2. http://news.bbc.co.uk/2/hi/europe/1901293.stm
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