On multidimensional indices of poverty

There has been a growing interest in what have come to be termed"multidimensional indices of poverty."Advocates for these new indices correctly point out that command over market goods is not all that matters to peoples'well-being, and that other factors need to be considered when quantifying the extent of poverty and informing policy making for fighting poverty. However, the author argues that there are two poorly understood issues in assessing these indices. First, does one believe that any single index can ever be a sufficient statistic for poverty assessments? Second, when aggregation is called for, should it be done in the space of"attainments,"using prices when appropriate, or that of"deprivations,"using weights set by the analyst? The paper argues that the goal for future poverty monitoring efforts should be to develop a credible set of multiple indices, spanning the dimensions of poverty most relevant to a specific setting, rather than a single multidimensional index. When weights are needed, they shouldn't be set solely by an analyst measuring poverty. Rather, they should be, as much as possible, consistent with well-informed choices made by poor people.Rural Poverty Reduction,Debt Markets,Services&Transfers to Poor,Achieving Shared Growth,Markets and Market Access

Comparing Multidimensional Poverty between Egypt and Tunisia

It is common to argue that poverty is a multidimensional issue. Yet few studies have included the various dimensions of deprivation to yield a broader and fuller picture of poverty. The present paper considers the multidimensional aspects of deprivation by specifying a poverty line for each aspect and combines their associated one-dimensional poverty-gaps into multidimensional poverty measures. An application of these measures to compare poverty between Egypt and Tunisia is illustrated using robustness analysis and household data from each country.Multidimensional poverty indices, Robustness analysis, Egypt, Tunisia

The Development of Multidimensional Poverty in Germany 1985-2007

This paper deals with concepts of multidimensional poverty measurement and applies them to Germany. Three concepts of poverty are examined and included into one multidimensional approach: economic well being, capability and social exclusion. The empirical application relies on indices introduced by Bourguigon and Chakravarty (2003), and Alkire and Foster (2008). It uses data from the German Socio-Economic Panel study. The indices are tested for their robustness in several aspects, and the influence of changing levels of substitutability between achievements on the poverty dimensions is examined. It transpires that the depth of poverty is relatively stable for the period 1985 to 2007. A structural analysis of the poor in 2007 reveals that the group at greatest risk of poverty is the unemployed.multidimensional measurement, poverty, deprivation, inequality

New multidimensional approaches to poverty measurement in Bosnia and Herzegovina

Unlike the standard unidimensional poverty indices, based mostly on monetary poverty measures, multidimensional poverty indices may include numerous non-monetary poverty indicators. This study utilized fuzzy and Alkire – Foster (AF) and fuzzy methodology to assess the poverty level in Bosnia and Herzegovina (B&H) and to compare the results with official poverty assessments. In addition to consumption as a monetary measure, we constructed AF and fuzzy indices by including numerous non-monetary measures that indicate housing quality, possession of durable goods and the household structure. AF multidimensional indices for B&H are calculated based on data from Household Budget Surveys (2004, 2007 and 2011) and fuzzy poverty indices are calculated based on data from HBS 2011. This research has found the differences in the values, direction and dynamics between unidimensional and multidimensional approaches to poverty measurement. Authors state that it is not sufficient to base the creation of more efficient social policies and poverty reduction strategies exclusively on unidimensional indices that address just one dimension of poverty

Assessing Poverty with Non-Income Deprivation Indicators: Pakistan, 2008-09.

The approach to measure poverty in terms of financial deprivation has been widely criticised in the literature of welfare and wellbeing. It is argued that to understand the complex phenomenon of poverty or to evaluate household or individual wellbeing, a multidimensional exercise is imperative. This research quantifies the level of multidimensional poverty in Pakistan using household data of Pakistan Social and Living Standard Measurement Survey. Multidimensional poverty in terms of the popular FGT (headcount, poverty gap, poverty severity) indices is estimated for the year 2009. Indicators of human poverty, poor housing and deprivation in household physical assets are included in estimating poverty in multi-dimensional context. For assessing the inter-temporal consistency in the methodology, poverty indices are also developed for the year 2005. JEL classification: I32, I31 Keywords: Poverty, Multidimensional, Categorical Principal Component Analysis, Poverty Indices, Pakista

Robust Multidimensional Poverty Comparisons

We investigate how to make poverty comparisons using multidimensional indicators of well-being, showing in particular how to check whether the comparisons are robust to the choice of poverty indices and poverty lines. Our methodology applies equally well to either of what can be defined as "union" and "intersection" approaches to dealing with multidimensional indicators of well-being. When one of two variables is discrete, our methods specialize to those that Atkinson (1991), Jenkins and Lambert (1993) and others have developed to deal with household composition heterogeneity. The results also extend the statistical results recently derived in Davidson and Duclos (2000) to cases where well-being is measured in two or more dimensions. We thus derive the sampling distribution of various multidimensional poverty estimators, including estimators of the "critical" frontiers of poverty lines above which multidimensional poverty comparisons are no longer ethically robust.Multidimensional Poverty, Stochastic Dominance

Multidimensional indices of achievements and poverty: What do we gain and what do we lose?

Poverty and wellbeing are multi-dimensional. Nobody questions that deprivations and achievements go beyond income. There is, however, sharp disagreement on whether the various dimensions of poverty and wellbeing can be aggregated into a single, multi-dimensional index in a meaningful way. Is aggregating dimensions of poverty and wellbeing useful? Is it sensible? Here I summarize and contrast three key papers that respond these questions in strikingly different ways. The papers are: The HDI 2010: New Controversies, Old Critiques by Jeni Klugman, Francisco Rodríguez and Hyung-Jin Choi; Understandings and Misunderstandings of Multidimensional Poverty Measurement by Sabina Alkire and James Foster; and, On Multidimensional Indices of Poverty by Martin Ravallion.poverty measurement, multidimensional poverty, deprivation, axioms, Human Development Index, capabilities, substitutability, trade-offs, welfare, country classifications

Measuring Chronic Multidimensional Poverty: A Counting Approach

How can indices of multidimensional poverty be adapted to produce measures that quantify both the joint incidence of multiple deprivations and their chronicity? This paper adopts a new approach to the measurement of chronic multidimensional poverty. It relies on the counting approach of Alkire and Foster (2011) for the measurement of multidimensional poverty in each time period and then on the duration approach of Foster (2009) for the measurement of multidimensional poverty persistence across time. The proposed indices are sensitive both to (i) the share of dimensions in which people are deprived and (ii) the duration of their multidimensional poverty experience. A related set of indices is also proposed to measure transient poverty. The behaviour of the proposed two families is analysed using a relevant set of axioms. An empirical illustration is provided with a Chilean panel dataset spanning the period from 1996 to 2006

Multidimensional Indices of Achievements and Poverty: What Do We Gain and What Do We

Poverty and wellbeing are multi-dimensional. Nobody questions that deprivations and achievements go beyond income. There is, however, sharp disagreement on whether the various dimensions of poverty and wellbeing can be aggregated into a single, multi-dimensional index in a meaningful way. Is aggregating dimensions of poverty and wellbeing useful? Is it sensible? Here I summarize and contrast three key papers that respond these questions in strikingly different ways. The papers are: The HDI 2010: New Controversies, Old Critiques by Jeni Klugman, Francisco Rodríguez and Hyung-Jin Choi; Understandings and Misunderstandings of Multidimensional Poverty Measurement by Sabina Alkire and James Foster; and, On Multidimensional Indices of Poverty by Martin Ravallion.poverty measurement, multidimensional poverty, deprivation, axioms, Human Development Index, capabilities, substitutability, trade-offs, welfare, country classifications

Health and Income Poverty in Ireland, 2003-2006

Recent advances in the measurement of bi-dimensional poverty are applied to a measure of poverty which incorporates income and health poverty. The correlation between income and poverty is examined using the Receiver Operating Characteristics curve. Following from this unidimensional and bi-dimensional poverty indices are calculated for Ireland for the years 2003-2006. Individual and bi-dimensional indices generally show a decline over the period with the biggest decline between 2003 and 2004. The results are generally not sensitive to the degree of poverty aversion or the substitutability between the different dimensions of poverty.receiver operating characteristic, multidimensional poverty