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Sequential Stochastic Dominance and the Robustness of Poverty Orderings

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Author Info
Duclos, Jean-Yves ()
Makdissi, Paul ()

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Abstract

When 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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Paper provided by Université Laval - Département d'économique in its series Cahiers de recherche with number 9905.

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Date of creation: 1999
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Handle: RePEc:lvl:laeccr:9905

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Related research
Keywords: Poverty; Equivalence scales; Stochastic dominance;

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Find related papers by JEL classification:
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 and Poverty - - - Measurement and Analysis of Poverty

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  1. Christiaensen, Luc & Scott, Christopher & Wodon, Quentin, 2002. "Poverty Measurement and Analysis," MPRA Paper 11810, University Library of Munich, Germany. [Downloadable!]
  2. Paul Makdissi & Quentin Wodon, 2004. "Migration, poverty, and housing in Honduras," Estudios de Economia, University of Chile, Department of Economics, vol. 31(1 Year 20), pages 5-20, June. [Downloadable!]
  3. Paul Makdissi & Stéphane Mussard, 2006. "Decomposition of s - Concentration Curves," Cahiers de recherche 0641, CIRPEE. [Downloadable!]
    Other versions:
  4. Paul Makdissi & Quentin Wodon & Yannick Therrien, 2005. "Public Transfers, Equivalence Scales and Poverty in Canada and the United States," Cahiers de recherche 05-04, Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke. [Downloadable!]
  5. Coudouel, Aline & Hentschel, Jesko & Wodon, Quentin, 2002. "Medición y análisis de la pobreza
    [Poverty Measurement and Analysis]    ," MPRA Paper 10491, University Library of Munich, Germany. [Downloadable!]
  6. William C. Horrace & Joseph T. Marchand & Timothy M. Smeeding, 2005. "Ranking Inequality: Applications of Multivariate Subset Selection," Center for Policy Research Working Papers 70, Center for Policy Research, Maxwell School, Syracuse University. [Downloadable!]
    Other versions:
  7. Jean-Yves Duclos & David Sahn & Stephen D. Younger, 2005. "Robust Multidimensional Spatial Poverty Comparisons in Ghana, Madagascar, and Uganda," Cahiers de recherche 0528, CIRPEE. [Downloadable!]
    Other versions:
  8. Claudio Zoli & Peter J. Lambert, 2005. "Sequential procedures for poverty gap dominance," University of Oregon Economics Department Working Papers 2005-1, University of Oregon Economics Department, revised 01 Jan 2005. [Downloadable!]
  9. Jean-Yves Duclos & David Sahn & Stephen D. Younger, 2006. "Robust Multidimensional Poverty Comparisons with Discrete Indicators of Well-being," Cahiers de recherche 0628, CIRPEE. [Downloadable!]
  10. Duclos, Jean-Yves & Makdissi, Paul & Wodon, Quentin, 2003. "Poverty-Reducing Tax Reforms with Heterogeneous Agents," Cahiers de recherche 0313, CIRPEE. [Downloadable!]
    Other versions:
  11. Paul Makdissi & Quentin Wodon, 2001. "Fuel Poverty and Access to Electricity:\\ Comparing Households When They Differ in Needs," Cahiers de recherche 01-03, Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke, revised 2004. [Downloadable!]
  12. Coudouel, Aline & Hentschel, Jesko & Wodon, Quentin, 2002. "Измерение И Анализ Бедности
    [Poverty Measurement and Analysis]    ," MPRA Paper 10492, University Library of Munich, Germany. [Downloadable!]
  13. Coudouel, Aline & Hentschel, Jesko & Wodon, Quentin, 2002. "Mesure et analyse de la pauvreté
    [Poverty Measurement and Analysis]    ," MPRA Paper 10490, University Library of Munich, Germany. [Downloadable!]
  14. Paul Makdissi & Quentin Wodon, 2006. "Fuel poverty and access to electricity: comparing households when they differ in needs," Applied Economics, Taylor and Francis Journals, vol. 38(9), pages 1071-1078, May. [Downloadable!] (restricted)
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