6.4.4 Application: Poverty Measures
For a poverty index, we need a poverty line that may be an exogenously given constant ζ or may depend on the income distribution ζ(F). An important class of poverty indices can then be described in the following way:
where p is a poverty evaluation function that is nonincreasing in y and takes the value zero for y ≥ ζ(F). Once again we need the IF, which is given by
where pζ is the differential of p with respect to its second argument (Cowell and Victoria-Feser, ...