Link to Facebook PageLink to RSS Feed Link to Twitter

Unidimensional Poverty Measurement: Axioms, Measures and Dominance

Suman Seth

Video 1: Unidimensional Poverty Measures and their axioms

  • Introduction to the two steps in poverty measurement: identification and aggregation.
  • Definition of the different types of axioms (properties) for poverty measures.

Video 2: Unidimensional Poverty Measures’ fulfillment of axioms and dominance

  • Properties of well-known unidimensional poverty measures and policy implications.
  • Unidimensional stochastic dominance (dominance conditions and their connection to poverty measures).

Key readings

Watch the videos (includes video guide)

Listen to audio

Downloads

Video

Part I

Get the Flash Player to see this content.

Guide to the video, video 1

00:00 Introduction

01:50 Introduction to the concepts of poverty measurement

09:33 Present three types of policy focus of a distribution of achievements; here focus is on the base of the distribution (poverty)

Part 1: Unidimensional Poverty Measures

11:58 Identification: who is poor?

16:37 Significance and definition of poverty line(s)

21:00 Aggregation: What is the level of poverty?

Part 2: Explanation of Axioms (or properties) of Poverty Measures

22:23 The list of axioms from Foster (2006), which properties do you want your measure to have?

24:16 Invariance axioms: symmetry axiom

27:21 Invariance axioms: replication axiom

29:22 Invariance axioms: focus axiom

30:27 Invariance axioms: scale invariance axiom

32:00 Invariance axioms: normalisation axiom

32:56 Dominance axioms: monotonicity axiom

35:48 Dominance axioms: transfer axiom

43:51 Continuity

45:56 Subgroup axioms: introduction

47:30 Subgroup axioms: subgroup consistency

51:16 Subgroup axioms: additive decomposability

53:04 Theorem of Foster and Shorrock for subgroup axioms

53:29 Advanced axiom: transfer sensitivity

Part II

Get the Flash Player to see this content.

Guide to the video, video 2

00:00 Introduction and classifications of measures (basic and advanced)

Part 1: Basic Unidimensional Measures’ fulfillment of axioms and policy implications

02:27 The headcount ratio

07:11 The income gap ratio

09:59 The poverty gap ratio

21:18 The squared poverty gap

30:23 The Foster-Greer-Thorbecke class of measures, summary of measures

Part 2: Advanced Unidimensional Measures’ fulfillment of axioms

30:50 Sen-Shorrocks-Thon measures

34:07 Watts measure

37:22 Clark-Hemming-Ulph-Chakravarty Class of measures

Part 3: Unidimensional Dominance and Fulfillments of Axioms in Different Orderings

38:24 Which poverty line? (identification)

40:52 Which measure? (aggregation)

42:55 The dominance approach

44:15 Variable-line poverty orderings – order of stochastic dominance developed by Foster and Shorrocks (1988)

45:46 Poverty orderings based on the headcount ratio

49:44 First order stochastic dominance – including definition

52:31 What happens if the cumulative distribution function (CDF) of achievements cross? Second order stochastic dominance – including definition

57:37 What happens when the second order dominance curves cross? Third order stochastic dominance – including definition

59:10 In practice: limited range of poverty orderings

 

Listen to audio

Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

Download materials

Lecture Slides

Exercise

Answer Key

Download Video

Download Audio

Useful resources:

For supplementary reading on this topic view

Reading List

Key readings covered in these lectures

Video 1:

Foster, J.E. (2006). Poverty Indices. In Janvry, A. and Kanbur, R. (Eds). Poverty Inequality and Development: Essays in Honor to Erik Thorbecke. New York: Springer

Foster, J.E. and Sen, A. (1997). On Economic Inequality: After a Quarter Century. Annex to the Expanded Edition of A. Sen. On Economic Inequality. Oxford: Clarendon Press. Section A.6.

Video 2:

Foster, J.E. and Sen, A. (1997). On Economic Inequality: After a Quarter Century. Annex to the Expanded Edition of A. Sen. On Economic Inequality. Oxford: Clarendon Press. Section A.6.

Foster, J.E. and Shorrocks, A. (1988). Poverty Orderings and welfare Dominance. Social Choice and Welfare. 5: 179-198

Atkinson, A.B. (1987). On the Measurement of Poverty. Econometrica. 55:749-764