Assessing global poverty and inequality: Income, resources, and capabilities

Are global poverty and inequality on the rise or are they declining? And is the quality of life of the world's poorest people getting worse or better? These questions are often given conflicting answers by economists, the World Bank, and social activists. One reason for this is that assessments of quality of life can be made in terms of people's income, their resources, or their functionings and capabilities. This essay discusses the pros and cons of these evaluative approaches, and it argues that all approaches have complementary strengths and should therefore in principle all be considered. Moreover, being aware that assessments of poverty and inequality can be made using these different frameworks helps us to understand the conflicting claims.