Income and inequality elasticities of poverty of Northeastern states of Brazil: an analysis of the period of 1981 to 2009

Abstract

The objective of this study is to estimate and analyze the income and inequality elasticities of poverty in the Northeast Region of Brazil. For this, the study used the proportion of poor people, the proportion of indigents, the Gini index, and the average per capita income for the period of 1981 to 2009. Regarding the methodology used to measure the elasticities, the study chose econometric techniques for panel data, considering that information was used for the nine Northeastern states of Brazil in that period. The results showed that the inequality elasticities of poverty are greater (in absolute values) than the income elasticities of poverty. Thus, policies to reduce income inequality in the Northeast Region tend to impact more on poverty reduction than olicies to increase average income.