INEQUALITY, POVERTY AND MOBILITY: CHOOSING INCOME OR CONSUMPTION AS WELFARE INDICATORS

. The literature on economic income disribution has largely debated the issue of which is the best indicator of individual welfare: income or consumption. The implications of the choice are not only a matter for theoretical discussion but are clearly very relevant when undertaking any empirical distributional analysis. The discussion has largely centred the debate on the implications of this choice on inequality and poverty statics while that on mobility and poverty dynamics is very scarce due, in many occassions, to the availability of consumption survey data in a longitudinal format. In this paper we analyse the effects of choosing income or consumption on household mobility and poverty dynamics using very detailed information on both household incomes and expenditures.