Publication: Integrating Mortality into Poverty
Measurement through the Poverty Adjusted
Life Expectancy Index
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Date
2022-07
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Published
2022-07
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Abstract
Poverty measures typically do not account for mortality, resulting in counter-intuitive evaluations. The reason is that they (i) suffer from a mortality paradox and (ii) do not attribute intrinsic value to the lifespan. The paper proposes the first poverty index that always attributes a positive value to lifespan and does not suffer from the mortality paradox. This index, called the poverty-adjusted life expectancy, follows an expected lifecycle utility approach a la Harsanyi and is based on a single normative parameter that transparently captures the trade-off between poverty and mortality. This indicator can be straightforwardly generalized to account for unequal lifespans. Empirically, we show that accounting for mortality substantially changes cross-country comparisons and trends. The paper also quantifies the fraction of these comparisons that are robust to the choice of the normative parameter.
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“Baland, Jean-Marie; Cassan, Guilhem; Decerf, Benoit. 2022. Integrating Mortality into Poverty
Measurement through the Poverty Adjusted
Life Expectancy Index. Policy Research Working Papers;10133. © World Bank. http://hdl.handle.net/10986/37790 License: CC BY 3.0 IGO.”
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