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Livelihood Assets as a Multidimensional Inverse Proxy for Poverty: A District-level Analysis of the Indian Indo-Gangetic Plains


  • Olaf Erenstein


The measurement of poverty is important yet problematic and controversial. This study assesses livelihood asset indicators from the sustainable livelihood approach as a multidimensional inverse proxy for poverty. The study develops and contrasts different asset-based proxies building on the five livelihood capitals: natural, physical, human, social and financial. The Indian Indo-Gangetic Plains with 280 million rural inhabitants and covering 0.47 million km2 are used as an empirical case to illustrate and contrast the multidimensional proxies, drawing on secondary data for 18 quantitative district-level indicators. Principal components derived directly from the district-level indicators proved to be a good proxy for the district-level poverty head count ratio (adjusted R2 = 0.51). A composite livelihood asset index aided interpretation but at a significant cost of overall explanatory power (adjusted R2 = 0.42). Alternative models derived from the five livelihood assets provide more acceptable trade-offs between explanatory and interpretational power. Livelihood asset-based approaches can thus provide an inverse proxy for absolute poverty.

Suggested Citation

  • Olaf Erenstein, 2011. "Livelihood Assets as a Multidimensional Inverse Proxy for Poverty: A District-level Analysis of the Indian Indo-Gangetic Plains," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 12(2), pages 283-302.
  • Handle: RePEc:taf:jhudca:v:12:y:2011:i:2:p:283-302
    DOI: 10.1080/19452829.2011.571094

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    References listed on IDEAS

    1. Caterina Ruggeri Laderchi & Ruhi Saith & Frances Stewart, 2003. "Does it Matter that we do not Agree on the Definition of Poverty? A Comparison of Four Approaches," Oxford Development Studies, Taylor & Francis Journals, vol. 31(3), pages 243-274.
    2. Frank Ellis, 2000. "The Determinants of Rural Livelihood Diversification in Developing Countries," Journal of Agricultural Economics, Wiley Blackwell, vol. 51(2), pages 289-302.
    3. Sudhir Anand and Amartya Sen, 1994. "Human development Index: Methodology and Measurement," Human Development Occasional Papers (1992-2007) HDOCPA-1994-02, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
    4. Ellis, Frank, 2000. "Rural Livelihoods and Diversity in Developing Countries," OUP Catalogue, Oxford University Press, number 9780198296966.
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    Cited by:

    1. Muhammad Mehedi Masud & Fatimah Kari & Siti Rohani Binti Yahaya & Abul Quasem Al-Amin, 2016. "Livelihood Assets and Vulnerability Context of Marine Park Community Development in Malaysia," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 125(3), pages 771-792, February.
    2. repec:gam:jsusta:v:10:y:2018:i:2:p:353-:d:129447 is not listed on IDEAS
    3. Andrea Vigorito, 2011. "Bibliography on the Capability Approach 2010--2011," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 12(4), pages 607-612, November.


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