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Sequential procedures for poverty gap dominance

  • Claudio Zoli

    ()

  • Peter Lambert

    ()

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

Volume (Year): 39 (2012)
Issue (Month): 2 (July)
Pages: 649-673

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Handle: RePEc:spr:sochwe:v:39:y:2012:i:2:p:649-673
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  1. Davidson, R. & Duclos, J.-Y., 1998. "Statistical Inference for Stochastic Dominance and for the Measurement of Poverty and Inequality," G.R.E.Q.A.M. 98a14, Universite Aix-Marseille III.
  2. Peter J. Lambert & Xavier Ramos, 2001. "Welfare comparisons: sequential procedures for heterogenous populations," Working Papers wp0114, Department of Applied Economics at Universitat Autonoma of Barcelona.
  3. 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.
  4. Jenkins, Stephen P & Lambert, Peter J, 1993. "Ranking Income Distributions When Needs Differ," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 39(4), pages 337-56, December.
  5. Shorrocks, Anthony F, 1995. "Revisiting the Sen Poverty Index," Econometrica, Econometric Society, vol. 63(5), pages 1225-30, September.
  6. Satya Ranjan Chakravarty, 1983. "Ethically Flexible Measures of Poverty," Canadian Journal of Economics, Canadian Economics Association, vol. 16(1), pages 74-85, February.
  7. Duclos, J. & Makdissi, P., 1999. "Sequential Stochastic Dominance and the Robustness of Poverty Orderings," Papers 99/6, New South Wales - School of Economics.
  8. 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.
  9. Bosmans, Kristof & Lauwers, Luc & Ooghe, Erwin, 2009. "A consistent multidimensional Pigou-Dalton transfer principle," Journal of Economic Theory, Elsevier, vol. 144(3), pages 1358-1371, May.
  10. 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, International Association for Research in Income and Wealth, vol. 44(4), pages 497-513, December.
  11. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
  12. Nicolas Gravel & Patrick Moyes, 2006. "Ethically Robust Comparisons of Distributions of Two Individual Attributes," IDEP Working Papers 0605, Institut d'economie publique (IDEP), Marseille, France, revised Aug 2006.
  13. Erwin Ooghe, 2004. "Bounded Sequential Dominance Criteria," Center for Economic Studies - Discussion papers ces0405, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
  14. Atkinson, A B, 1987. "On the Measurement of Poverty," Econometrica, Econometric Society, vol. 55(4), pages 749-64, July.
  15. Bourguignon, Francois, 1989. "Family size and social utility : Income distribution dominance criteria," Journal of Econometrics, Elsevier, vol. 42(1), pages 67-80, September.
  16. 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.
  17. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
  18. 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.
  19. Buhong Zheng, 1999. "On the power of poverty orderings," Social Choice and Welfare, Springer, vol. 16(3), pages 349-371.
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