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Does The Specification of A New Class of Poverty Measures Matter? Evidence from Tunisia


  • Sami Bibi


The evaluation of the horizontal inefficiency of an anti-poverty design is often reduced to the determination of the type I errors, which occur where eligible individuals are not awarded benefits. Because under-coverage ratio does not consider the social cost resulting from unequal treatment of like individuals, it is irrelevant in assessing the severity and the depth of horizontal inefficiency. Also, when the cost of inequality approach is adopted to derive from a poverty measure, respecting the transfer axiom, a cost of inequality that is decomposable into two components, corresponding to vertical and horizontal inequality respectively, it is no longer possible to have different aversions toward these two forms of inequality. We follow then the cost of inequality approach after specifying a new class of poverty measures, which are parameterized by two coefficients allowing so different preferences toward these two equality principles. When these two coefficients are identical, the new poverty measures class reduces to the Foster, Greer and Thorbecke?s (1984) class, whose poverty measures imply the same aversion to vertical inequality and horizontal inequity. Further, for a given poverty line, the new class enables to characterize the set of poverty measures in which policymakers are indifferent between the post-reform poverty alleviation program and the status quo.

Suggested Citation

  • Sami Bibi, 2003. "Does The Specification of A New Class of Poverty Measures Matter? Evidence from Tunisia," Working Papers 0327, Economic Research Forum, revised 09 2003.
  • Handle: RePEc:erg:wpaper:0327

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    References listed on IDEAS

    1. Duclos, Jean-Yves, 1995. "On Equity Aspects of Imperfect Income Distribution," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 41(2), pages 177-190, June.
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    5. Brennan, Geoffrey, 1971. "Horizontal Equity: An Extension of an Extension," Public Finance = Finances publiques, , vol. 26(3), pages 437-456.
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    7. Jean-Yves Duclos & Peter J. Lambert, 2000. "A normative and statistical approach to measuring classical horizontal inequity," Canadian Journal of Economics, Canadian Economics Association, vol. 33(1), pages 87-113, February.
    8. Kaplow, Louis, 1989. "Horizontal Equity: Measures in Search of a Principle," National Tax Journal, National Tax Association, vol. 42(2), pages 139-154, June.
    9. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-231, March.
    10. Marcus C. Berliant & Robert P. Strauss, 1985. "The Horizontal and Vertical Equity Characteristics of the Federal Individual Income Tax, 1966-1977," NBER Chapters,in: Horizontal Equity, Uncertainty, and Economic Well-Being, pages 179-214 National Bureau of Economic Research, Inc.
    11. 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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