Gini, deprivation and complaints

Recent insights from the philosopher Larry Temkin have suggested a new basis for the measurement of income inequality, founded on the notion of individual “complaints” about income distribution. Under certain specifications of the relationship between complaints and personal incomes it can be shown that a concept similar to the concept of deprivation then emerges. In turn deprivation is related to the Gini index and to poverty. The paper examines the relationships between the Gini index and Lorenz orderings on the one hand and deprivation, poverty and complaints on the other hand

Understandings and Misunderstandings of Multidimensional Poverty Measurement

Multidimensional measures provide an alternative lens through which poverty may be viewed and understood. In recent work we have attempted to offer a practical approach to identifying the poor and measuring aggregate poverty (Alkire and Foster 2011). As this is quite a departure from traditional unidimensional and multidimensional poverty measurement – particularly with respect to the identification step – further elaboration may be warranted. In this paper we elucidate the strengths, limitations, and misunderstandings of multidimensional poverty measurement in order to clarify the debate and catalyse further research. We begin with general definitions of unidimensional and multidimensional methodologies for measuring poverty. We provide an intuitive description of our measurement approach, including a ‘dual cutoff’ identification step that views poverty as the state of being multiply deprived, and an aggregation step based on the traditional Foster Greer and Thorbecke (FGT) measures. We briefly discuss five characteristics of our methodology that are easily overlooked or mistaken and conclude with some brief remarks on the way forward.

The capability dilemma in operational poverty assessment

This paper compares the standard economic welfare approach to poverty measurement to the empirical approaches proposed in the capability literature under the special focus of their suitability for operational poverty assessment, i.e. targeting and outreach evaluation. We question whether the measurement of per capita daily expenditures compared with a monetary poverty line justifiably remains the most widely used approach regarding poverty assessment. Its underlying value judgments and unsatisfactory assumptions differ considerably from those of the capability concept of poverty but the two approaches can be linked and critically compared with respect to the role of income, the conceptualisation of absolute poverty and the development of operational tools. We argue that despite the progress made in operationalizing the capability approach, there remain serious challenges when focussing on targeting and outreach evaluation and propose three alternative solutions for dealing with this capability dilemma in practice.

The Bourguignon and Chakravarty multidimensional poverty family: A characterization

The family of multidimensional poverty indices introduced by Bourguignon and Chakravarty (Journal of Economic Inequality, 2003) has attracted a great deal of interest in the field of poverty measurement. In this note we explore a number of properties fulfilled by the members of this family, related to both the way to aggregate, for each individual, the deprivations in the various attributes, and the procedure for combining the individuals’ overall deprivations. Then we show that the properties we highlight characterize the functional form of the family.multidimensional poverty indices, Bourguignon and Chakravarty family, deprivation.

Multidimensional Poverty Measures from an Information Theory Perspective

This paper proposes to use an information theory approach to the design of multidimensional poverty indices. Traditional monetary approaches to poverty rely on the strong assumption that all relevant attributes of well-being are perfectly substitutable. Based on the idea of the essentiality of some attributes, scholars have recently suggested multidimensional poverty indices where the existence of a trade-off between attributes is relevant only for individuals who are below a poverty threshold in all of them (Bourguignon and Chakravarty 2003, Tsui 2002). The present paper proposes a method which encompasses both approaches and, moreover, it opens the door to an intermediate position which allows, to a certain extent, for substitution of attributes even in the case in which one or more (but not all) dimensions are above the set threshold. An application using individual well-being data from Indonesian households in 2000 is presented in order to compare the results under the different approaches.

Multidimensional Poverty Measures from an Information Theory Perspective

This paper proposes to use an information theory approach to the design of multidimensional poverty indices. Traditional monetary approaches to poverty rely on the strong assumption that all relevant attributes of well-being are perfectly substitutable. Based on the idea of the essentiality of some attributes, scholars have recently suggested multidimensional poverty indices where the existence of a trade-off between attributes is relevant only for individuals who are below a poverty threshold in all of them (Bourguignon and Chakravarty 2003, Tsui 2002). The present paper proposes a method which encompasses both approaches and, moreover, it opens the door to an intermediate position which allows, to a certain extent, for substitution of attributes even in the case in which one or more (but not all) dimensions are above the set threshold. An application using individual well-being data from Indonesian households in 2000 is presented in order to compare the results under the different approaches.Multidimensional Poverty, Information Theory

Issues in measuring and modeling poverty

Economists have relied heavily on household incomes or expenditures normalized for differences in household specific prices and demographics in their research and policy advice related to poverty and inequality. Recognizing the conceptual and empirical problems that confound such measures does not mean that they should be ignored. Instead, it indicates the need for supplementary measures to capture the missing items. Implementing a genuinely multidimensional approach will often make the welfare rankings of social states more difficult, but that fact points to the nonrobustness of low-dimensional rankings. This may have its own policy ramifications, with the possibility of correspondence between policy instruments and welfare objectives. The model types used to understand the poverty and inequity determination processes will be affected. Not only will there be more dependent variables to consider, but variables will have potentially complex relationships. These relationships will often be hard to empirically disentangle, despite richer integrated and longitudinal data sets. Such data open rich andrelevant agenda for research into the dynamics of poverty along multiple dimensions. A simultaneous attack on these issues from all three fronts - measurement, modeling, and data - offers hope of establishing a credible empirical foundation for public action in fighting poverty.Services&Transfers to Poor,Environmental Economics&Policies,Health Economics&Finance,Public Health Promotion,Poverty Monitoring&Analysis,Rural Poverty Reduction,Poverty Assessment,Environmental Economics&Policies,Health Economics&Finance,Safety Nets and Transfers

Multidimensional Poverty Comparisons within Europe. Evidence from the European Community Household Panel

This paper is a cross-sectional study on multidimensional poverty comparisons among the European Union countries, based on data provided by the European Community Household Panel (ECHP). In addition to the empirical results and the methodological problems, the study underlines the opportunities and the difficulties met while using the ECHP. The extended concept of poverty is relative and multidimensional and it reflects not only the financial aspects, but also dimensions like family composition, leisure, subjective deprivation, social participation, durable goods, housing conditions, access to education. Hence, it requires comparative assessments through ordinal measures. In order to compare the multidimensional poverty in 1999 and in a time interval (1994-1999), we have applied the Totally Fuzzy and Relative Method (TFR) in two forms: original (Cheli and Lemmi, 1995) and alternative (Cheli, D’Agostino and Filippone, 2001). The research reveals the hierarchy of countries according to different indicators of poverty. Although the rankings given by the two methods are similar in some parts, there are differences establishing the issues which arise when different features of deprivation are aggregated into a collective index. We show that the variables taken into account, the method and its interpretability, the data and the national particularities, they all have a big influence on the relative and comparative measurement of poverty.multidimensional poverty ; fuzzy set theory ; poverty comparisons ; poverty measurement ; well-being assessment

Indicators of Inequality and Poverty

This essay aims at a broad, main-stream account of the literature on inequality and poverty measurement in the space of income and, additionally, deals with measures of disparity and deprivation in the more expanded domain of capabilities and functionings. In addition to an introductory and a concluding part, the paper has four sections. The first of these, on measurement of income inequality, deals with preliminary concepts and definitions; a visual representation of inequality (the Lorenz curve); real-valued indices of inequality; properties of inequality indices; some specific inequality measures; and the relationship between Lorenz, welfare, and inequality orderings. The second section, on poverty, deals with the identification and aggregation exercises; properties of poverty indices; some specific poverty measures; the problem of plurality and unambiguous rankings; poverty measures and anti-poverty policy; and other issues in the measurement of poverty. The third section considers aspects of both congruence and conflict in the relationship amongst poverty, inequality, and welfare. The final substantive section advances the rationale for a more comprehensive assessment of human wellbeing than is afforded by the income perspective, it briefly reviews measurement concerns relating to generalized indices of deprivation and disparity, and it discusses the data and policy implications of the more expansive view of well-being adopted in the section.inequality, disparity, poverty, deprivation, measurement, income, capability, functioning, well-being

Measuring inequality of well-being with a correlation-sensitive multidimensional Gini index

We propose to measure inequality of well-being with a multidimensional generalization of the Gini coefficient. We derive two inequality indices from their underlying social evaluation functions. These functions are conceived as a double aggregation functions: one across the dimensions of well-being, and another across the individuals. They differ only with respect to the sequencing of aggregations. We argue that the sequencing that does not exclude the Gini index to be sensitive to the correlation between the dimensions is more attractive. We illustrate both Gini indices using Russian household data on three dimensions of well-being: expenditure, health and education.multidimensional inequality, single parameter Gini index, correlation increasing majorization, Russia.