Distribution-sensitivity of rank-dependent poverty measures
AbstractWe propose a criterion to rank poverty measures on the basis of distribution-sensitivity. Thecriterion compares reactions to ‘lossy’ transfers among the poor and is sufficiently general to beapplicable to any pair of poverty measures. We focus specifically on the class of rank-dependentpoverty measures and provide distribution-sensitivity rankings of the poverty gap ratio, the firstand second Sen measures, the Thon measure, the Shorrocks measure, and the Thon, Kakwani and S-Giniclasses of measures. Moreover, we discuss the relationship between the proposed criterion and twoalternative distribution-sensitivity criteria that directly apply the Arrow-Pratt theory of riskaversion. Finally, we provide an empirically tractable necessary and sufficient condition forunanimous poverty rankings by all continuous and replication invariant rank-dependent povertymeasures exhibiting a predetermined minimum degree of distribution-sensitivity.
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Date of creation: 2012
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- NEP-ALL-2012-09-16 (All new papers)
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