Four essays on poverty and public policy

This dissertation consists of four essays. The first two essays are devoted to an empirical analysis of poverty and inequality in Bangladesh. The third essay consists of a optimal control model of homelessness and poverty in the United States. The fourth essay is based on a case study of low income electricity programmes in Belgium. In the first essay, the unit level data of four rounds of the Household Expenditure Surveys of the Bangladesh Bureau of Statistics are used by an independent researcher for the first time to answer fundamental questions such as: What is the extent of poverty in Bangladesh? How has it evolved over time? Who are the poor? Why are they poor?; In the second essay, three innovations for the analysis of poverty and inequality are illustrated with the same data sets. First, an extension of a Gini decomposition is used to analyze stratification and inequality in a multidimensional context. Second, receiving operating characteristics curves are used to assess the discriminating power of targeting indicators. Third, survival analysis techniques are used for poverty comparisons. In the third essay, an optimal control model is developed to discuss the trade-off between programmes for the alleviation of poverty and homelessness which are consumption-oriented, such as welfare benefits and shelter beds, or investment-oriented, such as job training and low-income housing. Consumption-oriented programmes provide emergency safety nets, but do not yield long term solutions as investment-oriented programmes do. A balance between both types of programmes is needed. In the fourth essay, we consider the actual determinants of public policies toward poverty, and the departure from the standard assumptions of neo-classical theory that they imply. Several questions are considered, including: What are the forces shaping the introduction of new programmes and the termination of existing ones? On what scientific basis are public policy decisions made? What are the ethical arguments invoked to justify these policies? The essay provides a global framework through which answers to these questions can be provided. This framework is applied to low income electricity programmes in Brussels.