Reassessing the econometric measurement of inequality and | ResearchBunny

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Abstract

This article challenges the prevalent use of relative deprivation measures (Gini Index and relative poverty rates) in assessing inequality and poverty in advanced economies. Using Hong Kong as a case study, it demonstrates that the Gini Index masks social mobility and that relative poverty lines understate actual poverty. The author argues for a cost-of-living approach, defining the poverty line as the cost of essential goods and services. This approach reveals a significantly higher poverty rate in Hong Kong (44.47% in 2020) compared to the conventional relative measure (23.6%), highlighting a substantial shortfall of overlooked poor households.

Publisher

Humanities & Social Sciences Communications

Published On

May 11, 2023

Authors

Anson Au

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