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30 Years of economics for development

New Approaches to Measuring Poverty and Vulnerability

Project name/title
New Approaches to Measuring Poverty and Vulnerability
Year:
2010
Theme:
New Directions in Development Economics
Abstract:
This project will investigate issues concerning poverty and vulnerability in developing countries building on behavioural economics. The project seeks to derive poverty measures that are based on prospect theory, an alternative model to expected utility theory for decision-making under uncertainty. The new measure takes into account the reference point individuals use when evaluating their wellbeing and the possibility for loss aversion, which highlights the importance of downside risks. These measures are then implemented using panel and cross-section data from developing countries.
Keywords:
poverty measurement, vulnerability, behavioral economics, prospect theory
Contact:

UNU-WIDER focal point:
Finn Tarp, Director

Project Assistant:
Anne Ruohonen

Conferences
Publications:
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