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On the power of poverty orderings

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  • Buhong Zheng

    (Department of Economics, University of Colorado at Denver, Campus Box 181, P.O. Box 173364, Denver, CO 80217-3364, USA)

Abstract

This paper investigates the possibility of increasing the ordering power of additively separable poverty measures beyond the condition of second degree stochastic dominance by considering third degree stochastic dominance. For a fixed poverty line, the ordering power can be significantly enhanced by using the third degree criterion. For a range of poverty lines, the marginal power of the third degree criterion over the second degree depends critically upon the lower bound of the range; if the lower bound poverty line is arbitrarily close to zero, the two criteria coincide. The implications of a strong version of the transfer sensitivity axiom are also considered.

Suggested Citation

  • Buhong Zheng, 1999. "On the power of poverty orderings," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 16(3), pages 349-371.
    • Handle: RePEc:spr:sochwe:v:16:y:1999:i:3:p:349-371
    Note: Received: 20 November 1995/Accepted: 16 February 1998
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