Sequential Stochastic Dominance and the Robustness of Poverty Orderings
AbstractWhen comparing poverty across distributions, an analyst must select a poverty line to identify the poor, an equivalence scale to compare individuals from households of different compositions and sizes, and a poverty index to aggregate individual deprivation into an index of total poverty. A different choice of poverty line, poverty index or equivalence scale can of course reverse an initial poverty ordering. This paper develops sequential stochastic dominance conditions that throw light on the robustness of poverty comparisons to these important measurement issues. These general conditions extend well-known results to any order of dominance, to the choice of individual versus family based aggregation, and to the estimation of "critical sets" of measurement assumptions. Our theoretical results are briefly illustrated using data for four countries drawn from the Luxembourg Income Study data bases.
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Bibliographic InfoPaper provided by Université Laval - Département d'économique in its series Cahiers de recherche with number 9905.
Date of creation: 1999
Date of revision:
Poverty; Equivalence scales; Stochastic dominance;
Other versions of this item:
- Jean-Yves Duclos & Paul Makdissi, 2005. "Sequential Stochastic Dominance And The Robustness Of Poverty Orderings," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 51(1), pages 63-87, 03.
- Duclos, J. & Makdissi, P., 1999. "Sequential Stochastic Dominance and the Robustness of Poverty Orderings," Papers 99/6, New South Wales - School of Economics.
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
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