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Measuring poverty without the mortality paradox

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  • LEFEBVRE, Mathieu

    (University of Liège)

  • PESTIEAU, Pierre

    ()
    (Université catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium and CREPP, Université de Liège, B-4000 Liège, Belgium)

  • PONTHIERE, Grégory

    ()
    (Ecole Normale Supérieure, Paris and Paris School of Economics)

Abstract

Under income-differentiated mortality, poverty measures reflect not only the "true" poverty, but, also, the interferences or noise caused by the survival process at work. Such interferences lead to the Mortality Paradox: the worse the survival conditions of the poor are, the lower the measured poverty is. We examine several solutions to avoid that paradox. We identify conditions under which the extension, by means of a fictitious income, of lifetime income profiles of the prematurely dead neutralizes the noise due to differential mortality. Then, to account not only for the "missing" poor, but, also, for the "hidden" poverty (premature death), we use, as a fictitious income, the welfare-neutral income, making indifferent between life continuation and death. The robustness of poverty measures to the extension technique is illustrated with regional Belgian data.

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Bibliographic Info

Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2011068.

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Date of creation: 31 Dec 2011
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Handle: RePEc:cor:louvco:2011068

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Keywords: premature mortality; income-differentiated mortality; poverty measurement; censored income profile;

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  1. Harriet Orcutt Duleep, 1986. "Measuring the Effect of Income on Adult Mortality Using Longitudinal Administrative Record Data," Journal of Human Resources, University of Wisconsin Press, vol. 21(2), pages 238-251.
  2. Angus Deaton, 2002. "Health, inequality, and economic development," Working Papers 209, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
  3. Gary S. Becker & Tomas J. Philipson & Rodrigo R. Soares, 2005. "The Quantity and Quality of Life and the Evolution of World Inequality," American Economic Review, American Economic Association, vol. 95(1), pages 277-291, March.
  4. Stephen E. Snyder & William N. Evans, 2006. "The Effect of Income on Mortality: Evidence from the Social Security Notch," The Review of Economics and Statistics, MIT Press, vol. 88(3), pages 482-495, August.
  5. Ravi Kanbur & Diganta Mukherji, 2006. "Premature Mortality and Poverty Measurement," Working Papers id:707, eSocialSciences.
  6. Martin Salm, 2007. "The Effect of Pensions on Longevity: Evidence from Union Army Veterans," MEA discussion paper series 07118, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
  7. Broome, John, 2004. "Weighing Lives," OUP Catalogue, Oxford University Press, number 9780199243761, September.
  8. Deaton, A., 1998. "Aging and Inequality in Income and Health," Papers 181, Princeton, Woodrow Wilson School - Development Studies.
  9. Mukherjee, Diganta, 2001. "Measuring multidimensional deprivation," Mathematical Social Sciences, Elsevier, vol. 42(3), pages 233-251, November.
  10. Sen, Amartya, 1998. "Mortality as an Indicator of Economic Success and Failure," Economic Journal, Royal Economic Society, vol. 108(446), pages 1-25, January.
  11. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
  12. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-31, March.
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Cited by:
  1. PESTIEAU, Pierre & PONTHIERE, Grégory, 2012. "The public economics of increasing longevity," CORE Discussion Papers 2012005, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. LEFEBVRE, Mathieu & PESTIEAU, Pierre & PONTHIERE, Grégory, 2013. "FGT poverty measures and the mortality paradox: Theory and Evidence," CORE Discussion Papers 2013042, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  3. repec:hal:wpaper:halshs-00845490 is not listed on IDEAS
  4. repec:hal:wpaper:halshs-00676492 is not listed on IDEAS

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