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Poverty Measurement Under Risk Aversion Using Panel Data

Author

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  • Paul MAKDISSI

    (D´epartement d’´economique and CEREF, Universit´e de Sherbrooke, 2550 boulevard de l’Universit´e, Sherbrooke, Qu´ebec, Canada, J1K 2R1)

  • Quentin WODON

    (LCSPR, World Bank, 1818 H Street, NW, Washington, DC 20433, USA)

  • Guillermo Cruces

    (STICERD, London School of Economics, Houghton Street, London, WC2A 2AE,United Kingdom)

Abstract

This paper shows how to take into account risk aversion when measuring poverty under income variability. An application to British panel data suggests that income and poverty comparisons between the self-employed and other groups of households are sensitive to assumptions on the degree of risk aversion. The results point to the importance of panel data in order to account for risk aversion and income variability in the measurement of poverty.

Suggested Citation

  • Paul MAKDISSI & Quentin WODON & Guillermo Cruces, 2003. "Poverty Measurement Under Risk Aversion Using Panel Data," Cahiers de recherche 03-06, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
    • Handle: RePEc:shr:wpaper:03-06
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    References listed on IDEAS

    as
    1. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
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    8. Stefan Dercon & Pramila Krishnan, 2000. "Vulnerability, seasonality and poverty in Ethiopia," Journal of Development Studies, Taylor & Francis Journals, vol. 36(6), pages 25-53.
    9. Parker, Simon C, 1999. "The Inequality of Employment and Self-Employment Incomes: A Decomposition Analysis for the U.K," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 45(2), pages 263-274, June.
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    Citations

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    Cited by:

    1. Guillermo Cruces, 2005. "Income Fluctuations, Poverty and Well-Being Over Time: Theory and Application to Argentina," Labor and Demography 0502007, University Library of Munich, Germany.
    2. Paul MAKDISSI & Quentin WODON, 2004. "Price Liberalization and Farmer Welfare Under Risk Aversion: Cotton in Benin and Ivory Coast," Cahiers de recherche 04-09, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
    3. Gustav Kjellsson & Dennis Petrie & Tom (T.G.M.) van Ourti, 2018. "Measuring income-related inequalities in risky health prospects," Tinbergen Institute Discussion Papers 18-007/V, Tinbergen Institute.
    4. Pene Kalulumia & Denis Bolduc, 2004. "Generalized Mixed Estimation Of A Multinomial Discretecontinuous Choice Model For Electricity Demand," Cahiers de recherche 04-01, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
    5. Nouve, Kofi & Bambio, Yiriyibin & Kabore, Samuel & Wodon, Quentin, 2010. "Risque et mesures de la pauvreté rurale au Burkina Faso [Risk and Measures of Rural Poverty in Burkina Faso]," MPRA Paper 34374, University Library of Munich, Germany.
    6. Petr Hanel, 2003. "Impact Of Government Support Programs On Innovation By Canadian Manufacturing Firms," Cahiers de recherche 04-02, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.

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    More about this item

    Keywords

    Poverty; Risk; Self-employment; Panel data;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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