“Leftist”, “Rightist” and Intermediate Decompositions of Poverty Variations with an Application to China from 1990 to 2003

Abstract

This paper investigates the influence of invariance axioms in the decomposition of observed poverty variations into growth and inequality effects. After a complete and critical review of the invariance axioms suggested in the literature, we show that few information is needed for the ordering of the effects respectively obtained through scale, translation and intermediate invariance. Using Chinese data for the period 1990-2003, we find that some commonly observed results of the decomposition are contingent to the invariance axiom choices whilst other are robust to changes in ethical preferences.Poverty, inequality effect, growth effect, Decomposition, scale invariance, translationinvariance, intermediate invariance, China