Idenitfying the Vulnerable: Concepts and Measurement

Vulnerability to poverty, which broadly captures the susceptibility to becoming
poor in the future, has become an integral part of any deprivation assessment.
In this paper, we provide axiomatic foundations to much of the empirical literature
on vulnerability measurement which often relies on adhoc rules to identify the
vulnerable. Recognizing the formidable informational challenges in vulnerability
measurement, we propose and axiomatically characterise a class of identification
rules based on the future probability of falling into poverty. Additionally, we axiomatically
characterise the Foster-Greer-Thorbecke class of vulnerability measures
for those who are identified as vulnerable. Using this framework, we construct the
societal vulnerability measure and demonstrate that societal vulnerability can be
decomposed into vulnerabilities arising from the different shocks. Finally, we provide
an empirical illustration of the identification and measurement rules proposed
in this paper using real-world data from Bangladesh.