Assessing Deprivation with Ordinal Variables: Depth Sensitivity and Poverty Aversion

OPHI Working Papers

The challenges associated with poverty measurement within an axiomatic framework, especially with cardinal variables, have received due attention during the last four decades. However, there is a dearth of literature studying how to meaningfully assess poverty with ordinal variables, capturing the depth of deprivations. In this paper, we first propose a class of additively decomposable ordinal poverty measures and provide an axiomatic characterisation using a set of basic foundational properties. Then, in a novel effort, we introduce a set of properties operationalising prioritarianism in the form of different degrees of poverty aversion in the ordinal context, and characterise relevant subclasses. We demonstrate the efficacy of our methods using an empirical illustration studying sanitation deprivation in Bangladesh. We further develop related stochastic dominance conditions for all our characterised classes and subclasses of measures. Finally, we elucidate how our ordinal measurement framework is related to the burgeoning literature on multidimensional poverty measurement.

Citation: Seth, S. and Yalonetzky, G. (2018). ‘Assessing deprivation with ordinal variables: depth sensitivity and poverty aversion’, OPHI Working Paper 123, University of Oxford.

Also published in World Bank Economic Review, 2021, Vol. 35(3), pp. 793–811.

ordinal variables, poverty measurement, precedence to poorer people, Hammond transfer, degree of poverty aversion, stochastic dominance

Assessing Deprivation with Ordinal Variables: Depth Sensitivity and Poverty Aversion

Suman Seth and Gaston Yalonetzky
Series Name
OPHI Working Papers
Publication date
JEL Codes
I3, I32, D63, O1
Publication Number
WP 123