Assessing Deprivation with an Ordinal Variable: Theory and Application to Sanitation Deprivation in Bangladesh

51 Pages Posted: 28 Jan 2020

See all articles by Suman Seth

Suman Seth

University of Leeds - Economics Division; University of Oxford - Oxford Poverty & Human Development Initiative

Gaston Yalonetzky

University of Leeds - Leeds University Business School (LUBS); Leeds University Business School (LUBS) - Division of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: January 23, 2020

Abstract

The challenges associated with poverty measurement with a cardinal variable have received due attention during the last four decades, but there is a dearth of literature studying how to meaningfully assess poverty with an ordinal variable. This paper first proposes a class of simple, intuitive and policy-relevant poverty measures for ordinal variables. These measures are sensitive to depth of deprivations, unlike the headcount ratio. Moreover, under appropriate restrictions, the measures ensure that priority is given to the poorest among the poor while targeting, monitoring and evaluating poverty alleviation programs. To assess the robustness of poverty comparisons to alternative choices of parameters, various stochastic dominance tests are developed (some of which are themselves novel contributions to the stochastic dominance literature). The empirical illustration documenting changes in sanitation deprivation in Bangladesh showcases the measures' ability to identify instances in which overall sanitation deprivation improved while leaving the poorest behind.

Suggested Citation

Seth, Suman and Yalonetzky, Gaston, Assessing Deprivation with an Ordinal Variable: Theory and Application to Sanitation Deprivation in Bangladesh (January 23, 2020). World Bank Policy Research Working Paper No. 9120, Available at SSRN: https://ssrn.com/abstract=3524704

Suman Seth (Contact Author)

University of Leeds - Economics Division ( email )

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HOME PAGE: http://business.leeds.ac.uk/about-us/our-people/staff-directory/profile/suman-seth/

University of Oxford - Oxford Poverty & Human Development Initiative

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HOME PAGE: http://ophi.org.uk/about/people/research-associates-and-advisors/suman-seth/

Gaston Yalonetzky

University of Leeds - Leeds University Business School (LUBS) ( email )

Leeds LS2 9JT
United Kingdom

Leeds University Business School (LUBS) - Division of Economics ( email )

Leeds LS2 9JT
United Kingdom

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