| Abstract: | Analysis of the effects of policy changes on the poor is oftenhindered by the difficulties inherent in measuring poverty andcomparing levels of poverty before and after policy changes.This article outlines two techniques which can overcome manyof these measurement problems: stochastic dominance conditions,which can facilitate a robust poverty ranking of distributionsof living standards; and a decomposable poverty index, whichallows measured changes in aggregate poverty to be disaggregatedinto their various components, such as the changes among populationsubgroups, and growth and redistributive components. These techniquescan be applied to a wide range of indicators of economic well-beingand poverty lines, and to assumptions about the poor. The approachesare illustrated using household survey data from Indonesia beforeand after external shocks and the subsequent structural adjustmentprogram in the mid-1980s. The study finds that favorable initialconditions and a pro-poor pattern of growth enabled Indonesiato maintain its momentum in poverty alleviation during the period. |
