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Measuring Vulnerability

8 Pages Posted: 6 Mar 2011  

Ethan A. Ligon

University of California, Berkeley; Giannini Foundation

Date Written: March 2003

Abstract

Traditional poverty measures neglect several important dimensions of household welfare. In this paper we construct a measure of ‘vulnerability’ which allows us to quantify the welfare loss associated with poverty as well as the loss associated with any of a variety of different sources of uncertainty. Applying our measure to a panel dataset from Bulgaria in 1994, we find that poverty and risk play roughly equal roles in reducing welfare. Aggregate shocks are more important than idiosyncratic sources of risk, but households headed by an employed, educated male are less vulnerable to aggregate shocks than are other households.

Suggested Citation

Ligon, Ethan A., Measuring Vulnerability (March 2003). Available at SSRN: https://ssrn.com/abstract=1776647 or http://dx.doi.org/10.2139/ssrn.1776647

Ethan Ligon (Contact Author)

University of California, Berkeley ( email )

207 Giannini Hall #3310
Berkeley, CA 94720-3310
United States

Giannini Foundation

UC Davis
Davis, CA 95616
United States

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