Measuring poverty within and between population subgroups

In this paper we propose a decomposition of the Foster, Greer, Thorbecke (FGT) class of poverty indices into two components (namely, poverty within groups and poverty between groups) when both a community-wide threshold and a specific poverty line for each subgroup of population is used. The aim is to suggest an integrated perspective that takes into account both poverty within a specific subgroup of the population and poverty between different subgroups. This allows us to throw light on the relative well-being conditions of specific subgroups of the population as well as of society as a whole. The paper also includes an empirical application of the suggested methodology based on the European Community Household Panel