Poverty statics and dynamics: Does the accounting period matter?

Abstract

Any public policy aimed at reducing the effects of deprivation should be aware of the consequences of the use of different income accounting periods on eligibility and subsequent policy evaluation. This study aims to throw some light on the relevance of choosing a specific accounting period for public policy evaluation in a European country, in contrast to the existing evidence for the United States. Our analysis indicates that there are some significant differences in the results on poverty when using different income accounting periods. Researchers and decision-makers using an annual income measure, whatever the economic and social welfare context, should be aware that the use of quarterly data instead of yearly data will lead to a significantly larger number of poor households and a lower level of inequality and mobility in the distribution. © 2006 The Author(s) Journal compilation © 2006 Blackwell Publishing Ltd and the International Journal of Social Welfare.