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Opportunity-Sensitive Poverty Measurement

Author

Listed:
  • Brunori, Paolo

    (University of Florence)

  • Ferreira, Francisco H. G.

    (London School of Economics)

  • Lugo, Maria Ana

    (World Bank)

  • Peragine, Vito

    (University of Bari)

Abstract

We axiomatically characterize two classes of poverty measures which are sensitive to inequality of opportunity – one a strict subset of the other. The proposed indices are sensitive not only to income shortfalls from the poverty line, but also to differences in opportunities faced by people with different pre-determined characteristics, such as race or family background. Dominance conditions are established for each class of measures, and a sub-family of scalar indices, based on a rank-dependent aggregation of type-specific poverty levels, is also introduced. Using household survey data from eighteen European countries in 2005, we find substantial differences in country rankings based on standard FGT indices and on the new opportunity-sensitive indices. Cross-country differences in opportunity-sensitive poverty are decomposed into a level effect; a distribution effect; and a population composition effect.

Suggested Citation

  • Brunori, Paolo & Ferreira, Francisco H. G. & Lugo, Maria Ana & Peragine, Vito, 2013. "Opportunity-Sensitive Poverty Measurement," IZA Discussion Papers 7818, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp7818
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    Cited by:

    1. Paul Hufe & Ravi Kanbur & Andreas Peichlifo, 2022. "Measuring Unfair Inequality: Reconciling Equality of Opportunity and Freedom from Poverty [Multidimensional Poverty and Inequality]," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 89(6), pages 3345-3380.
    2. Francisco H. G. Ferreira & Vito Peragine, 2015. "Equality of opportunity: Theory and evidence," Working Papers 359, ECINEQ, Society for the Study of Economic Inequality.
    3. Francesco Pastore, 2016. "‘I Wish I Had 100 Dollars a Month …’ The Determinants of Poverty in Mongolia," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 28(5), pages 934-956, November.
    4. Monserrat Serio, 2021. "Desempeño educativo de los estudiantes en Argentina: Una mirada a la desigualdad de oportunidades del sistema educativo a partir de su medición y descomposición," Working Papers 86, Red Nacional de Investigadores en Economía (RedNIE).
    5. Denis-Alexandru DRAGOMIR, 2021. "Research on Data Analysis (Environmental, Social, And Economic) in the Context of Implementing the Circular Economy," Informatica Economica, Academy of Economic Studies - Bucharest, Romania, vol. 25(4), pages 63-75.

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    More about this item

    Keywords

    inequality of opportunity; poverty measures; poverty comparisons;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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