Integrating Mortality into Poverty
Measurement through the Poverty Adjusted
Life Expectancy Index

Baland, Jean-Marie; Cassan, Guilhem; Decerf, Benoit

Integrating Mortality into Poverty Measurement through the Poverty Adjusted Life Expectancy Index

Autores

Baland, Jean-Marie

Cassan, Guilhem

Decerf, Benoit

Editor

World Bank, Washington, DC

Descripción

Poverty measures typically do not account for mortality, resulting in counter-intuitive evaluations. The reason is that they (i) suffer from a mortality paradox and (ii) do not attribute intrinsic value to the lifespan. The paper proposes the first poverty index that always attributes a positive value to lifespan and does not suffer from the mortality paradox. This index, called the poverty-adjusted life expectancy, follows an expected lifecycle utility approach a la Harsanyi and is based on a single normative parameter that transparently captures the trade-oﬀ between poverty and mortality. This indicator can be straightforwardly generalized to account for unequal lifespans. Empirically, we show that accounting for mortality substantially changes cross-country comparisons and trends. The paper also quantifies the fraction of these comparisons that are robust to the choice of the normative parameter.