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Poverty Severity in a Multidimensional Framework: The Issue of Inequality between Dimensions

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  • Nicole Rippin

    (German Development Institute (DIE))

Abstract

This paper contributes to the axiomatic foundation of multidimensional poverty measures. A well-known problem in the multidimensional framework is that the identification method used in the one-dimensional framework, the union method, leads to exaggerated poverty rates. So far, this problem has been addressed by either changing the identification method itself or by introducing different weighting schemes – which all have in common that they assume attributes to be substitutes. In our paper we claim that the exaggeration problem is first of all an issue of how distribution sensitivity is accounted for and thus ought to be addressed at the aggregation instead of the identification level. In fact, we provide evidence that the way in which the Transfer principle, which accounts for distribution sensitivity in the one-dimensional framework, has been extended to the multidimensional framework is incomplete. We demonstrate that by solving this aggregation problem with the introduction of an additional axiom, the exaggeration problem at the identification level is, as a direct consequence, automatically solved as well. Finally, we derive a family of poverty measures whose specific, axiomatically implied weighting structure solves the exaggeration problem for ordinal as well as cardinal data while at the same time allowing for an independent relationship between attributes. We demonstrate that some of the most well-known poverty measures like the Multidimensional Poverty Index are special cases of this family.

Suggested Citation

  • Nicole Rippin, 2010. "Poverty Severity in a Multidimensional Framework: The Issue of Inequality between Dimensions," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 47, Courant Research Centre PEG.
  • Handle: RePEc:got:gotcrc:047
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    File URL: http://www2.vwl.wiso.uni-goettingen.de/courant-papers/CRC-PEG_DP_47.pdf
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    References listed on IDEAS

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    1. Felicitas Nowak-Lehmann D. & Inmaculada Martínez-Zarzoso & Dierk Herzer & Stephan Klasen & Axel Dreher, 2009. "In Search for a Long-run Relationship between Aid and Growth: Pitfalls and Findings," Ibero America Institute for Econ. Research (IAI) Discussion Papers 196, Ibero-America Institute for Economic Research.
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    Cited by:

    1. Berenger, Valerie, 2016. "Measuring Multidimensional Poverty in Three Southeast Asian Countries using Ordinal Variables," ADBI Working Papers 618, Asian Development Bank Institute.
    2. Arndt, Channing & Distante, Roberta & Hussain, M. Azhar & Østerdal, Lars Peter & Huong, Pham Lan & Ibraimo, Maimuna, 2012. "Ordinal Welfare Comparisons with Multiple Discrete Indicators: A First Order Dominance Approach and Application to Child Poverty," World Development, Elsevier, vol. 40(11), pages 2290-2301.
    3. Udaya Wagle, 2014. "The Counting-Based Measurement of Multidimensional Poverty: The Focus on Economic Resources, Inner Capabilities, and Relational Resources in the United States," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 115(1), pages 223-240, January.
    4. Sabina Alkire & James Foster, 2011. "Understandings and misunderstandings of multidimensional poverty measurement," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, pages 289-314.
    5. Jacques Silber, 2011. "A comment on the MPI index," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(3), pages 479-481, September.
    6. Yadira Diaz, 2015. "Differences in needs and multidimensional deprivation measurement," Working Papers 387, ECINEQ, Society for the Study of Economic Inequality.

    More about this item

    Keywords

    Multidimensional poverty measurement; axiomatic approach; aggregation of poor; poverty severity;

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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