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On the power of poverty orderings

  • Buhong Zheng


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

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    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.

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    Article provided by Springer in its journal Social Choice and Welfare.

    Volume (Year): 16 (1999)
    Issue (Month): 3 ()
    Pages: 349-371

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    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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