Income Distribution and Consumption Deprivation: An Analytical Link

Sushanta K. Mallick

Abstract


This article conceives poverty in terms of the consumption of essential
food, makes use of a new deprivation (or poverty) function, and
examines the effects of changes in the mean and the variance of the income
distribution on poverty, assuming a log-normal income distribution.
The presence of a saturation level of consumption can be treated
as a poverty-line threshold as opposed to an exogenous income-based
poverty line. Within such a consumption deprivation approach, the article
proves analytically that rising mean income reduces poverty while
rising variance of income distribution increases poverty.

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