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Sequential procedures for poverty gap dominance

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Author Info
Claudio Zoli () (University of Bologna)
Peter J. Lambert () (University of Oregon Economics Department)

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Abstract

Poverty evaluations differ from welfare evaluations in one significant aspect, the existence of a threshold or reference point, the poverty line. It is therefore possible to build up normative evaluation models in which comparisons are made taking distances from this reference point and not only from the origin to be ethically relevant. This is the case in our model of poverty comparisons over heterogeneous populations, which focuses upon poverty gaps and not incomes. When poverty lines differ for the different groups in the population we show that choosing poverty gaps instead of incomes as the relevant indicator brings in normatively appealing classes of poverty indices not previously accommodated. For these indices poverty comparisons over heterogeneous populations are implemented through sequential poverty gap curves (or poverty gap distributions) dominance. These novel conditions are logically related to those suggested in Atkinson and Bourguignon (1987) for welfare comparisons, and can also be grounded firmly upon those of Bourguignon (1989). The proportion of poor individuals in the society or their average poverty gap play a role in our comparisons that was neglected in the existing poverty dominance criteria for heterogeneous populations. Various intermediate poverty dominance conditions and a generalization of the poverty gap approach are also investigated.

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Paper provided by University of Oregon Economics Department in its series University of Oregon Economics Department Working Papers with number 2005-1.

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Length: 53
Date of creation: 01 Jan 2005
Date of revision: 01 Jan 2005
Handle: RePEc:ore:uoecwp:2005-1

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Related research
Keywords: poverty measurement poverty gap heterogeneous population sequential dominance.

Find related papers by JEL classification:
D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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  1. Bourguignon, F. & Fields, G., 1995. "Discontinuous Losses from Poverty, Generalized P& Measures and Optimal Transfers to the Poor," DELTA Working Papers 95-06, DELTA (Ecole normale supérieure).
  2. Fleurbaey, Marc & Hagnere, Cyrille & Trannoy, Alain, 2003. "Welfare comparisons with bounded equivalence scales," Journal of Economic Theory, Elsevier, vol. 110(2), pages 309-336, June. [Downloadable!] (restricted)
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  3. Satya Ranjan Chakravarty, 1983. "Ethically Flexible Measures of Poverty," Canadian Journal of Economics, Canadian Economics Association, vol. 16(1), pages 74-85, February. [Downloadable!] (restricted)
  4. Foster, James E & Shorrocks, Anthony F, 1988. "Poverty Orderings," Econometrica, Econometric Society, vol. 56(1), pages 173-77, January. [Downloadable!] (restricted)
  5. Chambaz, Christine & Maurin, Eric, 1998. "Atkinson and Bourguignon's Dominance Criteria: Extended and Applied to the Measurement of Poverty in France," Review of Income and Wealth, Blackwell Publishing, vol. 44(4), pages 497-513, December.
  6. Jenkins, Stephen P & Lambert, Peter J, 1997. "Three 'I's of Poverty Curves, with an Analysis of UK Poverty Trends," Oxford Economic Papers, Oxford University Press, vol. 49(3), pages 317-27, July. [Downloadable!] (restricted)
  7. Zheng, Buhong, 1997. " Aggregate Poverty Measures," Journal of Economic Surveys, Blackwell Publishing, vol. 11(2), pages 123-62, June. [Downloadable!] (restricted)
  8. Bourguignon, Francois, 1989. "Family size and social utility : Income distribution dominance criteria," Journal of Econometrics, Elsevier, vol. 42(1), pages 67-80, September. [Downloadable!] (restricted)
  9. Shorrocks, Anthony F, 1995. "Revisiting the Sen Poverty Index," Econometrica, Econometric Society, vol. 63(5), pages 1225-30, September. [Downloadable!] (restricted)
  10. Atkinson, A B, 1992. "Measuring Poverty and Differences in Family Composition," Economica, London School of Economics and Political Science, vol. 59(233), pages 1-16, February. [Downloadable!] (restricted)
  11. Jenkins, Stephen P & Lambert, Peter J, 1993. "Ranking Income Distributions When Needs Differ," Review of Income and Wealth, Blackwell Publishing, vol. 39(4), pages 337-56, December.
  12. Lambert, Peter J & Ramos, Xavier, 2002. "Welfare Comparisons: Sequential Procedures for Heterogeneous Populations," Economica, London School of Economics and Political Science, vol. 69(276), pages 549-62, November. [Downloadable!] (restricted)
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  13. Duclos, Jean-Yves & Makdissi, Paul, 1999. "Sequential Stochastic Dominance and the Robustness of Poverty Orderings," Cahiers de recherche 9905, Université Laval - Département d'économique. [Downloadable!]
    Other versions:
  14. Russell Davidson & Jean-Yves Duclos, 2000. "Statistical Inference for Stochastic Dominance and for the Measurement of Poverty and Inequality," Econometrica, Econometric Society, vol. 68(6), pages 1435-1464, November.
    Other versions:
  15. Jean-Yves Duclos & David E. Sahn & Stephen D. Younger, 2006. "Robust Multidimensional Poverty Comparisons," Economic Journal, Royal Economic Society, vol. 116(514), pages 943-968, October. [Downloadable!] (restricted)
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  16. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-31, March. [Downloadable!] (restricted)
  17. Atkinson, A B, 1987. "On the Measurement of Poverty," Econometrica, Econometric Society, vol. 55(4), pages 749-64, July. [Downloadable!] (restricted)
  18. 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)
  19. Donaldson, David & Pendakur, Krishna, 2004. "Equivalent-expenditure functions and expenditure-dependent equivalence scales," Journal of Public Economics, Elsevier, vol. 88(1-2), pages 175-208, January. [Downloadable!] (restricted)
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