Examining the interstate variations and interlinkage between water poverty and multidimensional poverty in India: evidence from household-level data

Purpose - The purpose of the present study is to examine the inter-relationship between the multi-dimensional poverty and water poverty using household level data for Indian states. Design/methodology/approach - A modified water poverty index (MWPI) for both rural and urban households was created using the five components approach and various quantifiable proxies. Principal component analysis (PCA) has been used for the construction of MWPI. Multidimensionality of poverty (MPI) is measured using the Alkire and Foster methodology. Further, the study has utilized correlation and Tobit regression analysis to show the relationship between MWPI and MPI. Findings - The empirical findings suggest that there is a positive and significant relationship between multidimensional poverty and water poverty, with the extent of relationship being greater in rural areas. The results show that in rural areas all the components of water poverty has significant impact on multidimensional poverty, whereas in urban areas except use component all others have significant impact on multidimensional poverty. Further, components of multidimensional poverty were also found to be significantly impacting water poverty. Practical implications - The study suggests that policymakers cannot treat both forms of poverty in isolation. If India aims to reduce poverty, then it needs to pay significant attention to improving water conditions. Originality/value - This is a pioneering attempt to construct water poverty index at the household level while accounting for micro-level differences for Indian economy. It highlights that water poverty leads to multi-dimensional poverty and vice-versa. Peer review - The peer review history for this article is available at:https://publons.com/publon/10.1108/IJSE-12-2021-0731.