Distribution-sensitivity of rank-dependent poverty measures

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Abstract

We propose a criterion to rank poverty measures on the basis of distribution-sensitivity. The criterion compares reactions to 'lossy' transfers among the poor. We focus on the class of rank-dependent poverty measures and provide distribution-sensitivity rankings of the poverty gap ratio, the first and second Sen measures, the Thon measure, the Shorrocks measure, and the Thon, Kakwani and S-Gini classes of measures. Moreover, we discuss the relationship between the proposed criterion and two alternative distribution-sensitivity criteria based on the Arrow-Pratt theory of risk aversion. Finally, we provide an empirically tractable necessary and sufficient condition for unanimous poverty rankings by all continuous and replication invariant rank-dependent poverty measures that exhibit a predetermined minimum degree of distribution-sensitivity.
Original languageEnglish
Pages (from-to)69-76
Number of pages8
JournalJournal of Mathematical Economics
Volume51
DOIs
Publication statusPublished - Mar 2014

Keywords

  • Poverty
  • Distribution-sensitivity
  • Rank-dependent poverty measures
  • Inequality aversion
  • Risk aversion
  • EXTREME INEQUALITY AVERSION
  • TRANSFER PRINCIPLES
  • GINI INDEXES
  • ORDERINGS
  • EQUALITY

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