Opportunity-Sensitive Poverty Measurement

This paper offers an axiomatic characterization of two classes of poverty measures that are sensitive to inequality of opportunity, one a strict subset of the other. The proposed indices are sensitive not only to income shortfalls from the poverty...

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Bibliographic Details
Main Authors:	Brunori, Paolo, Ferreira, Francisco, Lugo, Maria Ana, Peragine, Vito
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ABSOLUTE VALUE AGGREGATE POVERTY AVERAGE INCOME AVERAGE INCOMES CHANGES IN POVERTY CONFLICT CONSUMPTION EXPENDITURES COUNTERFACTUAL CROSS-COUNTRY DIFFERENCES CUMULATIVE DISTRIBUTION DECOMPOSABLE POVERTY DECOMPOSABLE POVERTY MEASURES DENSITY FUNCTION DESCRIPTIVE STATISTICS DEVELOPED COUNTRIES DEVELOPMENT POLICY DIMENSIONAL POVERTY DISPOSABLE INCOME DISTRIBUTION EFFECT DISTRIBUTION FUNCTION DISTRIBUTION FUNCTIONS ECONOMIC INEQUALITY ECONOMIC PERFORMANCE ECONOMIC POLICY EMPIRICAL ANALYSIS EMPIRICAL APPLICATION EMPIRICAL RESULTS EX-ANTE INEQUALITY EXCHANGE RATES HEADCOUNT POVERTY HIGH COST HOUSEHOLD HEADS HOUSEHOLD INCOME HOUSEHOLD INCOMES HOUSEHOLD NEEDS HOUSEHOLD SIZE HUMAN CAPITAL INCOME INCOME DIFFERENCES INCOME DISTRIBUTION INCOME DISTRIBUTIONS INCOME INCREASE INCOME LEVELS INCOME POVERTY INCOME TRANSFER INCOME-POVERTY INCREASE POVERTY INCREASING FUNCTION INEQUALITY INEQUALITY AVERSION INEQUALITY MEASUREMENT LABOR MARKET MAXIMUM INCOME MEAN INCOME MEAN INCOMES MEASUREMENT OF POVERTY MEASURING INEQUALITY MINIMUM LEVEL POLICY DISCUSSIONS POLICY IMPLICATIONS POLICY RESEARCH POOR POOR COUNTRY POOR INDIVIDUALS POPULATION COMPOSITION POPULATION SHARE POVERTY COMPARISONS POVERTY GAP POVERTY HEADCOUNT POVERTY INCIDENCE POVERTY INDEX POVERTY INDICES POVERTY LEVEL POVERTY LEVELS POVERTY LINE POVERTY LINES POVERTY MEASURE POVERTY MEASUREMENT POVERTY MEASURES POVERTY RANKINGS POVERTY RATE POVERTY RATES POVERTY STATUS POVERTY THRESHOLD PUBLIC ECONOMICS RELATIVE POVERTY SOCIAL POLICY
Online Access:	http://documents.worldbank.org/curated/en/2013/12/18674559/opportunity-sensitive-poverty-measurement http://hdl.handle.net/10986/16944

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Summary:	This paper offers an axiomatic characterization of two classes of poverty measures that are sensitive to inequality of opportunity, one a strict subset of the other. The proposed indices are sensitive not only to income shortfalls from the poverty line, but also to differences in the opportunities faced by people with different predetermined characteristics, such as race or family background. Dominance conditions are established for each class of measures and a sub-family of scalar indices, based on a rank-dependent aggregation of type-specific poverty levels, is also introduced. In empirical analysis using household survey data from eighteen European countries in 2005, substantial differences in country rankings based on standard Foster-Greer-Thorbecke indices and on the new opportunity-sensitive indices are found. Cross-country differences in opportunity-sensitive poverty are decomposed into a level effect, a distribution effect, and a population composition effect.

Opportunity-Sensitive Poverty Measurement

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