Question

what are the advantages and disadvantages of using the poverty line, Lorenz curve and derivation indices to measure poverty?

Answer 1

Poverty line :-

ADV- it focuses on the basic essentials which are needed to existence above a subsistence level and helps the administration to understand the less affluent's needs.

DISADV- inaccuracy in data derived through census etc.

Lorenz curve

ADV- it shows the extent of the income inequality in an economy.

DISADV- lorenz can cross yielding identicales and similar gini coefficients values.

Deprivation indices

ADV - provides social and economical picture of an area

DISADV- creates a bit confusion as, person living in an deorived area need not to be unhealthy. Whereas, being unhealthy is a part of deprivation score.