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Revisiting poverty and welfare dominance

Listed author(s):
  • Gian Maria Tomat

    ()

    (Bank of Italy)

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    The paper reviews the theory of the measurement of poverty. The axiomatic theory is described and the axiomatic properties of poverty indexes are related to assumptions on the functional form of the poverty index function. The notion of poverty ordering is then introduced and followed by a review of the relations between the poverty orderings than can be defined from classes of poverty index functions with well-defined functional form properties and the notions of first order and second order stochastic dominance. The analysis applies the results used in the theory of economic inequality to study the relationship between welfare orderings and Lorenz dominance. The theory is used to analyze poverty patterns in Italy in 1997-2005.

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    File URL: http://www.bancaditalia.it/pubblicazioni/temi-discussione/2007/2007-0651/en_tema_651.pdf
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    Paper provided by Bank of Italy, Economic Research and International Relations Area in its series Temi di discussione (Economic working papers) with number 651.

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    Date of creation: Nov 2007
    Handle: RePEc:bdi:wptemi:td_651_07
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    Web page: http://www.bancaditalia.it

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    1. Coulter, Fiona A E & Cowell, Frank A & Jenkins, Stephen P, 1992. "Equivalence Scale Relativities and the Extent of Inequality and Poverty," Economic Journal, Royal Economic Society, vol. 102(414), pages 1067-1082, September.
    2. Ramses H. Abul Naga, 2005. "Social Welfare Orderings: A Life-Cycle Perspective," Economica, London School of Economics and Political Science, vol. 72(3), pages 497-514, 08.
    3. Clark, Stephen & Hemming, Richard & Ulph, David, 1981. "On Indices for the Measurement of Poverty," Economic Journal, Royal Economic Society, vol. 91(362), pages 515-526, June.
    4. Buhmann, Brigitte, et al, 1988. "Equivalence Scales, Well-Being, Inequality, and Poverty: Sensitivity Estimates across Ten Countries Using the Luxembourg Income Study (LIS) Database," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 34(2), pages 115-142, June.
    5. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
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