Vulnerability and Poverty Measurement Issues for Public Policy

This paper presents the main approaches and tools to measuring poverty and vulnerability. This involves among other things the important issues of the setting of poverty lines, of the statistical use of surveys, of the empirical measurement of living standards, and of making poverty comparisons. The computation of aggregate poverty indices and the use of poverty dominance testing are also described. Throughout, implications for the understanding of the effects of public policy are highlighted, in particular those related to the design of safety nets.