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Measuring Vulnerability: The Director's Cut

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  • Ethan Ligon
  • Laura Schechter

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.

Suggested Citation

  • Ethan Ligon & Laura Schechter, 2002. "Measuring Vulnerability: The Director's Cut," WIDER Working Paper Series DP2002-86, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:dp2002-86
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    File URL: https://www.wider.unu.edu/sites/default/files/dp2002-86.pdf
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    References listed on IDEAS

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    Cited by:

    1. César Calvo, 2016. "Vulnerability to Poverty: Theory," Working Papers 2016-3, Lima School of Economics.
    2. Lei He & Shuyi Zhou, 2024. "Measuring household vulnerability to medical expenditure shock: method and its empirical application," International Journal of Health Economics and Management, Springer, vol. 24(3), pages 465-480, September.
    3. Ranjula Bali Swain & Maria S. Floro, 2010. "Reducing Vulnerability through Microfinance: Assessing the Impact of Self-Help Groups in India," Working Papers 2010-19, American University, Department of Economics.
    4. Ethan Ligon & Laura Schechter, 2003. "Measuring Vulnerability," Economic Journal, Royal Economic Society, vol. 113(486), pages 95-102, March.
    5. Nicholas Ngepah & Tsholofelo Makgalemele & Charles Shaaba Saba, 2023. "The relationship between education and vulnerability to poverty in South Africa," Economic Change and Restructuring, Springer, vol. 56(1), pages 633-656, February.
    6. Ranjula Bali Swain & Maria Floro, 2014. "Microfinance, vulnerability and risk in low income households," International Review of Applied Economics, Taylor & Francis Journals, vol. 28(5), pages 539-561, September.
    7. Deressa, Temesgen T. & Hassan, Rashid M. & Ringler, Claudia, 2009. "Assessing household vulnerability to climate change: The case of farmers in the Nile Basin of Ethiopia," IFPRI discussion papers 935, International Food Policy Research Institute (IFPRI).
    8. Luc J. Christiaensen & Kalanidhi Subbarao, 2005. "Towards an Understanding of Household Vulnerability in Rural Kenya," Journal of African Economies, Centre for the Study of African Economies, vol. 14(4), pages 520-558, December.
    9. Zang, Xuheng & Feng, Jiankang & Song, Mingyue, 2024. "The impact of air pollution on household vulnerability to poverty: An empirical study from household data in China," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 1369-1383.
    10. Takashi Kurosaki, 2006. "Consumption vulnerability to risk in rural Pakistan," Journal of Development Studies, Taylor & Francis Journals, vol. 42(1), pages 70-89.
    11. Baquie,Sandra & Fuje,Habtamu Neda, 2020. "Vulnerability to Poverty Following Extreme Weather Events in Malawi," Policy Research Working Paper Series 9435, The World Bank.

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