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Multidimensional Poverty Measures from an Information Theory Perspective

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Maria Ana Lugo

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Abstract

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.

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Paper provided by Queen Elizabeth House, University of Oxford in its series OPHI Working Papers with number ophiwp011.

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Date of creation: May 2008
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Handle: RePEc:qeh:ophiwp:ophiwp011

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Kai-yuen Tsui, 2002. "Multidimensional poverty indices," Social Choice and Welfare, Springer, vol. 19(1), pages 69-93. [Downloadable!] (restricted)
  2. Cowell, Frank A. & Kuga, Kiyoshi, 1981. "Additivity and the entropy concept: An axiomatic approach to inequality measurement," Journal of Economic Theory, Elsevier, vol. 25(1), pages 131-143, August. [Downloadable!] (restricted)
  3. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-25, April. [Downloadable!] (restricted)
  4. François Bourguignon & Satya Chakravarty, 2003. "The Measurement of Multidimensional Poverty," Journal of Economic Inequality, Springer, vol. 1(1), pages 25-49, April. [Downloadable!] (restricted)
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  5. Joseph Deutsch & Jacques Silber, 2005. "Measuring Multidimensional Poverty: An Empirical Comparison Of Various Approaches," Review of Income and Wealth, Blackwell Publishing, vol. 51(1), pages 145-174, 03. [Downloadable!] (restricted)
  6. Dagum, Camilo, 1997. "A New Approach to the Decomposition of the Gini Income Inequality Ratio," Empirical Economics, Springer, vol. 22(4), pages 515-31.
  7. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September. [Downloadable!] (restricted)
  8. Mussard Stéphane & Terraza Michel & Seyte Françoise, 2003. "Decomposition of Gini and the generalized entropy inequality measures," Economics Bulletin, Economics Bulletin, vol. 4(3), pages 1-5. [Downloadable!]
  9. A. Atkinson, 2003. "Multidimensional Deprivation: Contrasting Social Welfare and Counting Approaches," Journal of Economic Inequality, Springer, vol. 1(1), pages 51-65, April. [Downloadable!] (restricted)
  10. Decancq, Koen & Decoster, André & Schokkaert, Erik, 2009. "The Evolution of World Inequality in Well-being," World Development, Elsevier, vol. 37(1), pages 11-25, January. [Downloadable!] (restricted)
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  11. Pyatt, Graham, 1976. "On the Interpretation and Disaggregation of Gini Coefficients," Economic Journal, Royal Economic Society, vol. 86(342), pages 243-55, June. [Downloadable!] (restricted)
  12. Tsui Kai-Yuen, 1995. "Multidimensional Generalizations of the Relative and Absolute Inequality Indices: The Atkinson-Kolm-Sen Approach," Journal of Economic Theory, Elsevier, vol. 67(1), pages 251-265, October. [Downloadable!] (restricted)
  13. Jean-Yves Duclos & David E. Sahn & Stephen D. Younger, 2006. "Robust Multidimensional Poverty Comparisons," Economic Journal, Royal Economic Society, vol. 116(514), pages 943-968, October. [Downloadable!] (restricted)
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  14. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-31, March. [Downloadable!] (restricted)
  15. Stéphane Mussard & Françoise Seyte & Michel Terraza, 2003. "Decomposition of Gini and the generalized entropy inequality measures," Economics Bulletin, Economics Bulletin, vol. 4(7), pages 1-6. [Downloadable!]
  16. Hirschberg, Joseph G. & Maasoumi, Esfandiar & Slottje, Daniel J., 1991. "Cluster analysis for measuring welfare and quality of life across countries," Journal of Econometrics, Elsevier, vol. 50(1-2), pages 131-150, October. [Downloadable!] (restricted)
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  1. Joachim Merz & Tim Rathjen, 2009. "Time and Income Poverty: An Interdependent Multidimensional Poverty Approach with German Time Use Diary Data," SOEPpapers 215, DIW Berlin, The German Socio-Economic Panel (SOEP). [Downloadable!]
  2. Merz, Joachim & Rathjen, Tim, 2009. "Time and Income Poverty: An Interdependent Multidimensional Poverty Approach with German Time Use Diary Data," IZA Discussion Papers 4337, Institute for the Study of Labor (IZA). [Downloadable!]
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