Dynamic Measures of Individual Deprivation
Series/Report no.Cahier de recherche #2005-10
We introduce and axiomatize a one-parameter class of individual deprivation measures. Motivated by a suggestion of Runciman, we modify Yitzhaki’s index by multiplying it by a function that is interpreted as measuring the part of deprivation generated by an agent’s observation that others in its reference group move on to a higher level of income than itself. The parameter reflects the relative weight given to these dynamic considerations, and the standard Yitzhaki index is obtained as a special case. In addition, we characterize more general classes of measures that pay attention to this important dynamic aspect of deprivation.
BOSSERT, Walter et D'AMBROSIO, Conchita, «Dynamic Measures of Individual Deprivation», Cahier de recherche #2005-10, Département de sciences économiques, Université de Montréal, 2005, 15 pages.