Measuring poverty in ireland - a reply

Abstract

Dr Barrett's comments on our recent report on Poverty and the Social Welfare System in Ireland (1988) provide a welcome opportunity to deal with some of the points which have been raised in reaction to that report. While some important issues are involved, his comments do not show a clear understanding of them and are for the most part misplaced. We will attempt to clarify the issues raised in Barrett's comments under five headings. 1. Methodology of Poverty Measurement. 2. Equivalence Scales. 3. Income Concept and the Role of Non-cash Benefits. 4. Reliability of the Data. 5. Policy Relevance of the Report. While some important issues are raised, the main thrust of Barrett's comments is quite misplaced. The poverty line methodology he criticises is the one widely employed by economists in all developed countries; his attack on the reliability of the income distribution is based on inappropriate evidence; his assessment of the effects of including non-cash benefits is severely flawed, and he confuses measurement of the overall redistributive impact of state policy and measurement of poverty.