A method is proposed to provide robust poverty comparisons and robust evaluations of marginal policy reforms under income variability. Given that a household’s certainty equivalent income depends on both expected income and income variability, stochastic dominance tests are developed in order...

Income variablity reduces social welfare if individuals are risk averse, and it is likely to increase inequality if poorer households are more vulnerable to shocks. Using a simple method to estimate risk-adjusted measures of inequality and welfare and wage data from Mexico, this note shows that...

The aim of this paper is to provide an application of the Shapley Value to decompose financial portfolio risk. Decomposing the sample covariance risk measure yields relative measures, which enable securities of a portfolio to be classified according to risk scales.

This paper shows how to take into account risk aversion when measuring poverty under income variability. An application to British panel data suggests that income and poverty comparisons between the self-employed and other groups of households are sensitive to assumptions on the degree of risk...