What is the difference between the Head-Count Ratio and the Index of poverty measure?

What is the difference between the Head-Count Ratio and the Index of poverty measure?

Different measures of poverty have been developed by professional economists, among these the more important are as follows:

Head-Count Ratio:

Absolute poverty may be ensured by the number or ‘head count’ of those whose incomes fall below the ‘poverty line’. The poverty line sets a level below which persons live in absolute human misery and their health is always in jeopardy. Different studies have made use of different methodologies to define the poverty line.

But more generally, for example in India, in order to define the poverty line, most of the studies

(a) Have determined the minimum nutritional level of subsistence,

(b) Have estimated the cost of this minimum diet, and

(c) On the basis of the per capita consumption expenditure,

have delineated the line of poverty. Where change have in the magnitude of poverty have to be estimated between two different years, account has been taken of changes in the price level by using deflators of one type or another.

A problem with the head count index is its insensitivity to the intensity of poverty. In other words, a head count index simply measures the number of poor below the poverty line. It does not tell us anything about the income shortfall of the poor.

It may be desirable to group the poor into, say three distinct categories, viz., (i) the most destitutes, (ii) the destitutes, and (iii) the poor, There are a number of analytical and policy uses to which the disaggregated information can be put to:

The discrepancy between the structure of minimum wages and the poverty line can be easily calculated.

If the official poverty line may be deemed to define the society’s norm of subsistence, it would be possible to determine with fail” precision the two lower levels of subsistence.

The other correlates of poverty, such as low calories intake resulting in low physical strength, perhaps also insufficient development of mental facilities which go with poor education and low educational potential, and low trainability, can be scientifically investigated to determine at least the magnitude of the problem of those facilities which lie deep trapped in these kinds of vicious circles and have lost the ability to escape.

A large body of economists also seems to share this view what is required is a measure of poverty that included fulfillment of certain basic human needs.

Poverty Gap:

Poverty gap measures the total amount of income necessary to raise the people who are below the poverty line to that line.

The poverty gap adjusts the poverty ratio with the difference between the per capita consumption of the poor and the poverty line expressed as a percentage of the poverty line.

This is, therefore, a measure of the magnitude of the effort that would be required to shift the consumption of all persons below the poverty line to the level of the poverty line.

Squared Poverty Gap:

It is composed of not only the poverty ratio and the poverty gap ratio, but it also captures the consumption distribution of the poor as measured by the coefficient of variation.

This measure explicitly takes into account the higher intensity of efforts that are required to address the people who are progressively further below the poverty norm in order to bring them out of poverty.