A Class of Decomposable Poverty Measures with Public Transfers

This paper proposes a class of decomposable poverty measures. It incorporates ideas of flexible minimum basic requirement norms, relative deprivation and the presence of public transfer systems. Public transfers oftentimes take the form of implicit transfers and are not usually reflected in the reported income figures. Depending on the access and usage of public transfer systems, real consumption possibility can be very different for different individuals. This paper demonstrates that a poverty measure can be used in a straightforward manner to derive a metric to evaluate the efficiency of the public transfer systems to reach their intended targets. Some of the policy implications are also provided