Three Shapley rankings of poverty measures according to their sensitivity to the three components of poverty

Abstract

Most poverty measures in the literature depend on the three components of poverty, incidence, intensity and inequality among the poor. However, the implication of each component on the final poverty measure is something that has not been studied. It has been shown that families of parameter-dependent poverty indices can be more or less sensitive to transfers among the poor, depending on the value of the parameter taken. This value will affect the sensitivity of the family of measures to the inequality among the poor. In this paper we intend to carry out an analogous study for the three components of poverty. We provide three poverty rankings of some poverty measures according to their sensitivity to incidence, intensity and inequality. In fact, we offer orderings for all the rank-dependent poverty measures and two families of rank-independent poverty measures.