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Vulnerability to poverty: An empirical comparison of alternative measures

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  • Celidoni, Martina
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    Abstract

    The recent common feeling about a skyrocketing economic risk has drawn increasing attention to its role and consequences on individuals' welfare. In literature one of the concepts that aims to measure it is vulnerability to poverty, that is the probability, today, of being in poverty or to fall into deeper poverty in the future (The World Bank, 2011). This paper compares empirically the several measures of individual vulnerability proposed in the literature, in order to understand which is the best signal of poverty that can be used for policies purposes. To this aim the Receiver Operating Characteristic (ROC) curve, the Pearson and Spearman correlation coefficients are used as precision criteria. The results show that two groups of indexes can be identified, high- and low-performers, and, among the former, that proposed by Dutta et al. (2011) is the most precise.

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    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 33002.

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    Date of creation: 26 Aug 2011
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    Handle: RePEc:pra:mprapa:33002

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    Keywords: Poverty; Risk; Vulnerability; Receiver Operating Characteristic curve(ROC);

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    1. Jalan, Jyotsna & Ravallion, Martin, 1998. "Determinants of transient and chronic poverty : evidence from rural China," Policy Research Working Paper Series 1936, The World Bank.
    2. David Madden, 2008. "Health and Income Poverty in Ireland, 2003-2006," Working Papers, School Of Economics, University College Dublin 200815, School Of Economics, University College Dublin.
    3. Raghav Gaiha & Katsushi Imai & Woojin Kang, 2007. "Vulnerability and poverty dynamics in Vietnam," The School of Economics Discussion Paper Series, Economics, The University of Manchester 0708, Economics, The University of Manchester.
    4. Andrea Brandolini & Silvia Magri & Timothy M. Smeeding, 2010. "Asset-based measurement of poverty," Temi di discussione (Economic working papers), Bank of Italy, Economic Research and International Relations Area 755, Bank of Italy, Economic Research and International Relations Area.
    5. Ligon, Ethan & Laura Schechter, 2002. "Measuring Vulnerability," Royal Economic Society Annual Conference 2002, Royal Economic Society 128, Royal Economic Society.
    6. Zhang, Yuan & Wan, Guanghua, 2008. "Can We Predict Vulnerability to Poverty?," Working Paper Series, World Institute for Development Economic Research (UNU-WIDER) RP2008/82, World Institute for Development Economic Research (UNU-WIDER).
    7. Gaiha, Raghav & Imai, Katsushi, 2008. "Measuring Vulnerability and Poverty: Estimates for Rural India," Working Paper Series, World Institute for Development Economic Research (UNU-WIDER) RP2008/40, World Institute for Development Economic Research (UNU-WIDER).
    8. Osberg, L., 1999. "Economic Insecurity in the Malaysian Context," Working Papers, John Deutsch Institute for the Study of Economic Policy 22, John Deutsch Institute for the Study of Economic Policy.
    9. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, Econometric Society, vol. 52(3), pages 761-66, May.
    10. Sanghamitra Bandyopadhyay & Frank Cowell, 2007. "Modelling vulnerability in the UK," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 2692, London School of Economics and Political Science, LSE Library.
    11. Bob Baulch & John Hoddinott, 2000. "Economic mobility and poverty dynamics in developing countries," Journal of Development Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 36(6), pages 1-24.
    12. Indranil Dutta & James Foster & Ajit Mishra, 2011. "On measuring vulnerability to poverty," Social Choice and Welfare, Springer, Springer, vol. 37(4), pages 743-761, October.
    13. Raghbendra Jha & Tu Dang & K L Sharma, 2008. "Vulnerability to Poverty in Fiji," Departmental Working Papers, The Australian National University, Arndt-Corden Department of Economics 2008-07, The Australian National University, Arndt-Corden Department of Economics.
    14. Md. Shafiul Azam & Katsushi S. Imai, 2010. "Vulnerability and poverty in Bangladesh," Working Papers id:2675, eSocialSciences.
    15. Lars Osberg, 1998. "Economic Insecurity," Discussion Papers, University of New South Wales, Social Policy Research Centre 0088, University of New South Wales, Social Policy Research Centre.
    16. Xiaobing Wang & Woojin Kang & Katsushi S. Imai, 2010. "Poverty and Vulnerability in Rural China: Effects of Taxation," Working Papers id:2886, eSocialSciences.
    17. Cesar Calvo & Stefan Dercon, 2005. "Measuring Individual Vulnerability," Economics Series Working Papers 229, University of Oxford, Department of Economics.
    18. Christopher Gerry & Carmen A Li, 2007. "Consumption Smoothing and Vulnerability in Russia," William Davidson Institute Working Papers Series wp885, William Davidson Institute at the University of Michigan.
    19. Pritchett, Lant & Suryahadi, Asep & Sumarto, Sudarno, 2000. "Quantifying vulnerability to poverty - a proposed measure, applied to Indonesia," Policy Research Working Paper Series 2437, The World Bank.
    20. Hoddinott, John & Quisumbing, Agnes, 2003. "Methods for microeconometric risk and vulnerability assessments," Social Protection Discussion Papers 29138, The World Bank.
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