Measurement of Poverty from Grouped Observations

This paper introduces two measures of poverty based on the approach of transfer of income from rich to poor in order to eliminate the existence of families having income less than the poverty line. Their derivation from grouped observations of income distribution is relatively simple permitting practical use. The first index ignores distribution among the poor. Introducing the Gini coefficient, the second index is sensitive to the pattern of the distribution among the poor. An application of the measures is employed based on Canadian data and the results provide a perspective on poverty among mutually exclusive regions or social group