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Measuring Vulnerability

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Author Info
Ligon, Ethan
Schechter, Laura

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Abstract

Traditional poverty measures neglect several important dimensions of household welfare. In this paper we construct a measure of "vulnerability" which allows us to quantify the welfare loss associated with poverty as well as the loss associated with any of a variety of different sources of uncertainty. Applying our measure to a panel dataset from Bulgaria in 1994, we find that poverty and risk play roughly equal roles in reducing welfare. Aggregate shocks are more important than idiosyncratic sources of risk, but households headed by an employed, educated male are less vulnerable to aggregate shocks than are other households.

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Publisher Info
Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2002 Annual meeting, July 28-31, Long Beach, CA with number 19899.

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Date of creation: 2002
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Handle: RePEc:ags:aaea02:19899

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Keywords: Research Methods/ Statistical Methods;

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References listed on IDEAS
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  1. Chris Elbers & Jean O. Lanjouw & Peter Lanjouw, 2003. "Micro--Level Estimation of Poverty and Inequality," Econometrica, Econometric Society, vol. 71(1), pages 355-364, January. [Downloadable!] (restricted)
  2. Ligon, Ethan & Laura Schechter, 2002. "Measuring Vulnerability," Royal Economic Society Annual Conference 2002 128, Royal Economic Society.
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  3. Glewwe, Paul & Hall, Gillette, 1998. "Are some groups more vulnerable to macroeconomic shocks than others? Hypothesis tests based on panel data from Peru," Journal of Development Economics, Elsevier, vol. 56(1), pages 181-206, June. [Downloadable!] (restricted)
  4. Ravallion, Martin, 1988. "Expected Poverty under Risk-Induced Welfare Variability," Economic Journal, Royal Economic Society, vol. 98(393), pages 1171-82, December. [Downloadable!] (restricted)
  5. Rothschild, Michael & Stiglitz, Joseph E., 1970. "Increasing risk: I. A definition," Journal of Economic Theory, Elsevier, vol. 2(3), pages 225-243, September. [Downloadable!] (restricted)
  6. Shubham Chaudhuri & Jyotsna Jalan & Asep Suryahadi, 2002. "Assessing household vulnerability to poverty from cross-sectional data: A methodology and estimates from Indonesia," Discussion Papers 0102-52, Columbia University, Department of Economics. [Downloadable!]
  7. Amin, Sajeda & Rai, Ashok S. & Topa, Giorgio, 2003. "Does microcredit reach the poor and vulnerable? Evidence from northern Bangladesh," Journal of Development Economics, Elsevier, vol. 70(1), pages 59-82, February. [Downloadable!] (restricted)
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  8. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May. [Downloadable!] (restricted)
  9. Glewwe, P. & Hall, G., 1995. "Who is Most Vulnerable to Macroeconomic Shocks? Hypotheses Tests Using Panel Data from Peru," Papers 117, World Bank - Living Standards Measurement.
  10. Lant Pritchett & Asep Suryahadi & Sudarno Sumarto, 2000. "Quantifying Vulnerability to Poverty - A Proposed Measure, with Application to Indonesia," Development Economics Working Papers 83, East Asian Bureau of Economic Research. [Downloadable!]
  11. Gamanou, Gisele & Morduch, Jonathan, 2002. "Measuring Vulnerability to Poverty," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
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