Poverty Orderings when Welfare Comparisons are Uncertain
نویسنده
چکیده
In applied welfare economics, equivalence scales for household composition and size corrections, and appropriate price de‡ators are minimum requirements to perform interhousehold comparisons of welfare, measured via household income or consumption information. In practice, the information available is insu¢cient and only approximate price or household composition corrections are available. Poverty comparisons between groups or over time are then problematic. In this paper, Atkinson’s standard results on ...rst order stochastic (welfare) dominance are extended to allow for pairwise comparisons of poverty of groups with di¤erent needs or facing di¤erent prices, when there is uncertainty on the true cost-ofliving de‡ators and equivalence scales. The approach is illustrated using household surveys from Ethiopia and Burkina Faso. JEL classi...cation codes: I32
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