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This paper offers an axiomatic characterization of two classes of poverty measures that are sensitive to inequality of opportunity-one a strict subset of the other. The proposed indices are sensitive not only to income shortfalls from the poverty line, but also to differences in the opportunities faced by people with different predetermined characteristics, such as race or family background. Dominance conditions are established for each class of measures and a sub-family of scalar indices, based on a rank-dependent aggregation of type-specific poverty levels, is also introduced. In empirical analysis using household survey data from eighteen European countries in 2005, substantial differences in country rankings based on standard Foster-Greer-Thorbecke indices and on the new opportunity-sensitive indices are found. Cross-country differences in opportunity-sensitive poverty are decomposed into a level effect, a distribution effect, and a population composition effect.

Inequality --- Inequality of Opportunity --- Macroeconomics and Economic Growth --- Poverty Comparisons --- Poverty Measures --- Poverty Reduction --- Rural Poverty Reduction --- Services & Transfers to Poor

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National poverty lines vary greatly across the world, from under USD 1 per person per day to over USD 40 (at 2005 purchasing power parity). What accounts for these huge differences, and can they be understood within a common global definition of poverty? For all except the poorest countries, the absolute, nutrition-based, poverty lines found in practice tend to behave more like relative lines, in that they are higher for richer countries. Prevailing methods of setting absolute lines allow ample scope for such relativity, even when nutritional norms are common across countries. Both macro data on poverty lines across the world and micro data on subjective perceptions of poverty are consistent with a weak form of relativity that combines absolute consumption needs with social-inclusion needs that are positive for the poorest but rise with a country's mean consumption. The strong form of relativism favored by some developed countries - whereby the line is set at a fixed proportion of the mean - emerges as the limiting case for very rich countries.

Absolute poverty --- Achieving Shared Growth --- Economic growth --- Household size --- Income --- Income distribution --- Income poverty --- Inequality --- Macroeconomics and Economic Growth --- National poverty --- National poverty lines --- Nutrition --- Nutritional status --- Per capita consumption --- Poor --- Poverty Assessments --- Poverty comparisons --- Poverty line --- Poverty Lines --- Poverty measurement --- Poverty rates --- Poverty Reduction --- Regional Economic Development --- Rural Poverty Reduction --- Targeting