14th journées Louis-André Gérard-Varet

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More on multidimensional, intertemporal and chronic poverty orderings
Florent Bresson, Jean-Yves Duclos

Last modified: 2015-05-11

Abstract


As noted by Bourguignon & Fields (1997), being poor can generate significant well-being losses, whatever the extent of observed deprivations, so that marginal changes that lift individuals out of poverty can  result in non-marginal variations of poverty and well-being. This paper investigates the consequences of such discontinuities for obtaining robust ordering of intertemporal or multidimensional poverty and contrasts the corresponding stochastic dominance conditions with the one suggested in Duclos, Sahn & Younger (2006} and Bresson & Duclos (forthcoming) that were proposed for classes of poverty indices that show continuity at the frontier of the poverty domain. We prove that the necessary and sufficient conditions for testing the robustness of poverty orderings with respect to the poverty frontier and the poverty index result in an impossibility of testing this robustness from a practical point of view. However, robustness checks can be performed when restrictions are added on the shape or on the location of the poverty frontier. We also show how the suggested tools can help study chronic poverty, the chronic poor being those in the bottom part of the poverty domain (see for instance Jalan & Ravallion, 2000, Foster, 2009).

Keywords


Poverty comparisons, discontinuities, intertemporal well-being, stochastic dominance, multidimensional poverty