Sequential Stochastic Dominance and the Robustness of Poverty Orderings

Jean-Yves Duclos and Paul Makdissi ()

Cahiers de recherche from Université Laval - Département d'économique

Abstract:

When comparing poverty across distributions, an analyst must select a poverty line to identify the poor, an equivalence scale to compare individuals from households of different compositions and sizes, and a poverty index to aggregate individual deprivation into an index of total poverty. A different choice of poverty line, poverty index or equivalence scale can of course reverse an initial poverty ordering. This paper develops sequential stochastic dominance conditions that throw light on the robustness of poverty comparisons to these important measurement issues. These general conditions extend well-known results to any order of dominance, to the choice of individual versus family based aggregation, and to the estimation of "critical sets" of measurement assumptions. Our theoretical results are briefly illustrated using data for four countries drawn from the Luxembourg Income Study data bases.

Keywords: Poverty; Equivalence scales; Stochastic dominance (search for similar items in EconPapers)
JEL-codes: D31 D63 I32 (search for similar items in EconPapers)
Date: 1999
New Economics Papers: this item is included in nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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http://www.ecn.ulaval.ca/w3/recherche/cahiers/1999/9905.pdf (application/pdf)

Related works:
Journal Article: SEQUENTIAL STOCHASTIC DOMINANCE AND THE ROBUSTNESS OF POVERTY ORDERINGS (2005)
Working Paper: Sequential Stochastic Dominance and the Robustness of Poverty Orderings (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:lvl:laeccr:9905

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