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 language | English |
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Pages (from-to) | 69-76 |
Number of pages | 8 |
Journal | Journal of Mathematical Economics |
Volume | 51 |
DOIs | |
Publication status | Published - Mar 2014 |
Keywords
- Poverty
- Distribution-sensitivity
- Rank-dependent poverty measures
- Inequality aversion
- Risk aversion
- EXTREME INEQUALITY AVERSION
- TRANSFER PRINCIPLES
- GINI INDEXES
- ORDERINGS
- EQUALITY