INTRODUCTION.

The main body of this paper is organized in three sections covering inequality, poverty and the effect of taxes and benefits. Each section contains a survey of the literature on measurement, followed by a brief summary of the main past studies. The article focuses mainly on the extent to which different measures emphasize different parts of the distribution. Most of the measures of poverty discussed involve the manipulation of three numbers - the first giving the proportion of the population in poverty, taken as being those with incomes below a given line, usually the Supplementary Benefit Scale Rate; the second intended to indicate the amount by which their incomes fall short of that line; and the third some measure of inequality amongst the poor. Some, more sophisticated, measures introduce parameters to weight different areas of the distribution of incomes among the poor. This paper takes at face value the assumption that "poverty" can be reliably and interestingly measured by relating incomes to a single line, the article emphasizes that there are two poverty lines - one, the absolute standard moving in line with retail prices, and the other, the "relative" standard moving with nominal earnings.