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Vulnerability to poverty: An empirical comparison of alternative measures

Celidoni, Martina (2011): Vulnerability to poverty: An empirical comparison of alternative measures.

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Abstract

The recent common feeling about a skyrocketing economic risk has drawn increasing attention to its role and consequences on individuals' welfare. In literature one of the concepts that aims to measure it is vulnerability to poverty, that is the probability, today, of being in poverty or to fall into deeper poverty in the future (The World Bank, 2011). This paper compares empirically the several measures of individual vulnerability proposed in the literature, in order to understand which is the best signal of poverty that can be used for policies purposes. To this aim the Receiver Operating Characteristic (ROC) curve, the Pearson and Spearman correlation coefficients are used as precision criteria. The results show that two groups of indexes can be identified, high- and low-performers, and, among the former, that proposed by Dutta et al. (2011) is the most precise.

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