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Determining the threshold separating poor from non-poor populations is one of the most influential choices when measuring poverty. Commonly used selection criteria leave considerable room for discretion or are not appropriate as academic standards. This vacuum in academic guidance leads to arbitrary and/or ideologically driven choices. This can greatly influence the measurement of a societal phenomenon, and thus research and public policy decisions over a period that extends well beyond the mandate of those making that threshold decision. This paper sets out an empirical validation method that contributes to reducing the range of thresholds and thereby aids decision-makers in making that normative decision. Our method uses an absolute concept of empirical validity and requires that the microdata for measuring poverty hold additional information closely associated with poverty. The method builds on insights from theory on measurement error that, for any given threshold, some persons are wrongly identified as poor (false positives) and others are wrongly identified as not poor (false negatives), and that the reduction of one error can only be attained by increasing the other. Our method uses the additional microdata to disaggregate the population into (likely) false positives and (likely) false negatives and analyzes marginal changes in this composition as the poverty threshold becomes stricter. Using Canadian data, we show that this approach substantially narrows the range of thresholds for two unidimensional poverty indicators, namely a material deprivation and an income poverty indicator. The underlying principle of the method extends to other (unidimensional) social indicators. The analysis itself can also serve other purposes, such as deepening our understanding of poverty and the cost-effectiveness of policies to reduce it. [ABSTRACT FROM AUTHOR]

This paper investigates whether two popular poverty indicators, namely income poverty and material deprivation, reach similar conclusions about the poverty reduction effects of income transfers. Such evaluations generally use income poverty. It is well-known, however, that poverty indicators regularly disagree about a person's poverty status. What is less known is whether such disagreement also confounds estimates of a program's poverty reduction effects. This paper compares the targeting performance of social assistance, housing and family transfers in countries with different welfare states namely Germany, France, Ireland, the Netherlands, Sweden and the United Kingdom. It finds that a transfer's targeting performance does not differ much when defining the transfer's target group either as the poorest income quintile or the poorest material deprivation quintile. Yet, when combining the information from both indicators, transfers appear much more effective in reaching those groups that both poverty indicators identify as part of the target group. Transfers also appear much more efficient in excluding non-target populations. For the groups on which the poverty indicators disagree, more analysis is needed. Triangulation between poverty indicators thus improves the validity of program evaluations as it enables a better separation between (potential) poverty measurement issues and the measurement of a program's (potential) effects. [ABSTRACT FROM AUTHOR]

Governments' social indicator portfolios have expanded taking the multidimensionality of poverty into account. However, few if any, of the indicators provide insight into the degree to which persons experience several unfavourable conditions at the same time. This paper reviews and tests various indicators of cumulative deprivation that can be used to monitor child poverty and to identify vulnerable groups of children. This paper studies headcounts (counting deprived individuals) and adjusted headcounts (counting deprivations of deprived individuals) while the cumulative threshold can be distribution dependent (relative) or not (absolute). The measures are empirically tested on the 2007 EU-SILC data for the United Kingdom, Germany, France and the Netherlands. The findings indicate that the absolute adjusted headcount with a cumulative threshold of one deprivation is the most attractive candidate: it has an intuitive interpretation; it is sensitive to the breadth of deprivations but not oversensitive to changes in the methodology. [ABSTRACT FROM AUTHOR]