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Departmental Technical Reports (CS)

Semi-Heuristic Poverty Measures Used by Economists: Justification Motivated by Fuzzy Techniques

Karen Villaverde, New Mexico State University - Main CampusFollow
Nagwa Albehery, New Mexico State University - Main CampusFollow
Tonghui Wang, New Mexico State University - Main CampusFollow
Vladik Kreinovich, The University of Texas at El PasoFollow

Publication Date

12-2011

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Technical Report: UTEP-CS-11-61

Abstract

To properly gauge the extent of poverty in a country or in a region, economists use semi-heuristic poverty measures such as the Foster-Greer-Thorbecke (FGT) metric. These measures are used because it was empirically shown that they capture the commonsense meaning of the extent of poverty better than previously proposed measures. However, the fact that these measures are better then a few earlier proposed ones does not necessarily mean that these measures are the best possible; so, it is desirable to look for optimal poverty measures. In this paper, we first use fuzzy techniques to provide a commonsense interpretation of FGT poverty measures, and then show that under certain reasonable conditions, these measures are indeed optimal.

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