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Vulnerability to poverty: An empirical comparison of alternative measures


  • Celidoni, Martina


The recent common feeling about a skyrocketing economic risk has drawn increasing attention to its role and consequences on individuals' welfare. In literature one of the concepts that aims to measure it is vulnerability to poverty, that is the probability, today, of being in poverty or to fall into deeper poverty in the future (The World Bank, 2011). This paper compares empirically the several measures of individual vulnerability proposed in the literature, in order to understand which is the best signal of poverty that can be used for policies purposes. To this aim the Receiver Operating Characteristic (ROC) curve, the Pearson and Spearman correlation coefficients are used as precision criteria. The results show that two groups of indexes can be identified, high- and low-performers, and, among the former, that proposed by Dutta et al. (2011) is the most precise.

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  • Celidoni, Martina, 2011. "Vulnerability to poverty: An empirical comparison of alternative measures," MPRA Paper 33002, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:33002

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    References listed on IDEAS

    1. Cesar Calvo & Stefan Dercon, 2005. "Measuring Individual Vulnerability," Economics Series Working Papers 229, University of Oxford, Department of Economics.
    2. Christopher Gerry & Carmen Li, 2010. "Consumption smoothing and vulnerability in Russia," Applied Economics, Taylor & Francis Journals, vol. 42(16), pages 1995-2007.
    3. Sanghamitra Bandyopadhyay & Frank A Cowell, 2007. "Modelling Vulnerability in the UK," STICERD - Distributional Analysis Research Programme Papers 89, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    4. Lars Osberg, 1998. "Economic Insecurity," Discussion Papers 0088, University of New South Wales, Social Policy Research Centre.
    5. David Madden, 2011. "Health and income poverty in Ireland, 2003–2006," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(1), pages 23-33, March.
    6. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    7. Andrea Brandolini & Silvia Magri & Timothy M. Smeeding, 2010. "Asset-based measurement of poverty," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 29(2), pages 267-284.
    8. Hoddinott, John & Quisumbing, Agnes, 2003. "Methods for microeconometric risk and vulnerability assessments," Social Protection and Labor Policy and Technical Notes 29138, The World Bank.
    9. Bob Baulch & John Hoddinott, 2000. "Economic mobility and poverty dynamics in developing countries," Journal of Development Studies, Taylor & Francis Journals, vol. 36(6), pages 1-24.
    10. Raghbendra JHA & Tu DANG & Krishna Lal SHARMA, 2009. "Vulnerability to poverty in Fiji," International Journal of Applied Econometrics and Quantitative Studies, Euro-American Association of Economic Development, vol. 9(1).
    11. Zhang, Yuan & Wan, Guanghua, 2008. "Can We Predict Vulnerability to Poverty?," WIDER Working Paper Series 082, World Institute for Development Economic Research (UNU-WIDER).
    12. Jamal, Haroon, 2009. "Assessing Vulnerability to Poverty:Evidence from Pakistan," MPRA Paper 40228, University Library of Munich, Germany.
    13. Indranil Dutta & James Foster & Ajit Mishra, 2011. "On measuring vulnerability to poverty," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 37(4), pages 743-761, October.
    14. Gaiha, Raghav & Imai, Katsushi, 2008. "Measuring Vulnerability and Poverty: Estimates for Rural India," WIDER Working Paper Series 040, World Institute for Development Economic Research (UNU-WIDER).
    15. Md. Shafiul Azam & Katsushi Imai, 2009. "Vulnerability and Poverty in Bangladesh," The School of Economics Discussion Paper Series 0905, Economics, The University of Manchester.
    16. Katsushi Imai & Xiaobing Wang & Woojin Kang, 2010. "Poverty and vulnerability in rural China: effects of taxation," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 8(4), pages 399-425.
    17. Ethan Ligon & Laura Schechter, 2003. "Measuring Vulnerability," Economic Journal, Royal Economic Society, vol. 113(486), pages 95-102, March.
    18. Pritchett, Lant & Suryahadi, Asep & Sumarto, Sudarno, 2000. "Quantifying vulnerability to poverty - a proposed measure, applied to Indonesia," Policy Research Working Paper Series 2437, The World Bank.
    19. Osberg, L., 1998. "Economic Insecurity in the Malaysian Context," Working Papers 18, John Deutsch Institute for the Study of Economic Policy.
    20. Katsushi Imai & Raghav Gaiha & Woojin Kang, 2011. "Vulnerability and poverty dynamics in Vietnam," Applied Economics, Taylor & Francis Journals, vol. 43(25), pages 3603-3618.
    21. Jalan, Jyotsna & Ravallion, Martin, 1998. "Determinants of transient and chronic poverty : evidence from rural China," Policy Research Working Paper Series 1936, The World Bank.
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    More about this item


    Poverty; Risk; Vulnerability; Receiver Operating Characteristic curve(ROC);

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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