IDEAS home Printed from https://ideas.repec.org/p/got/gotcrc/200.html
   My bibliography  Save this paper

How Serious is the Neglect of Intra-Household Inequality in Multi-dimensional Poverty Indices?

Author

Listed:
  • Stephan Klasen

    (Georg-August University Göttingen)

  • Rahul Lahoti

    (University of Göttingen)

Abstract

Income-based as well as most existing multidimensional poverty indices (MPI) assume equal distribution within the household and thus are likely to lead to yield a biased assessment of individual poverty, and poverty by age or gender. In this paper we first show that the direction of the bias depends on how these measures use individual data to determine the poverty status of households, while the impact of these assumptions on inequality between individual cannot be determined a priori. We then use data from the 2012 Indian Human Development Survey to create a standard household-based MPIs closely related to the MPI proposed by Alkire and Santos (2014) as well as UNDP (2014), and compare that to an individual level MPI that individualizes education and nutrition and some aspects of the living standards dimensions. We find that the poverty rate of females is 14 percentage points higher than that of men in our individual MPI measure but only 2 percentage points higher when using the household-based measure. Similarly, the age differentials in poverty are much larger using the individual-based measure. Using a decomposable inequality measure, we find the contribution of intrahousehold inequality to the total inequality in the individual deprivation score inequality to be 30% and total inequality is also some 30% higher using the individual-based measure, while inequality among the poor is found to be 5% smaller using the individual measure.

Suggested Citation

  • Stephan Klasen & Rahul Lahoti, 2016. "How Serious is the Neglect of Intra-Household Inequality in Multi-dimensional Poverty Indices?," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 200, Courant Research Centre PEG.
  • Handle: RePEc:got:gotcrc:200
    as

    Download full text from publisher

    File URL: http://www2.vwl.wiso.uni-goettingen.de/courant-papers/CRC-PEG_DP_200.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Jeremy Lise & Shannon Seitz, 2011. "Consumption Inequality and Intra-household Allocations," Review of Economic Studies, Oxford University Press, vol. 78(1), pages 328-355.
    2. Martin Browning & Pierre-André Chiappori & Arthur Lewbel, 2013. "Estimating Consumption Economies of Scale, Adult Equivalence Scales, and Household Bargaining Power," Review of Economic Studies, Oxford University Press, vol. 80(4), pages 1267-1303.
    3. Suman Seth and Sabina Alkire, 2014. "Measuring and Decomposing Inequality among the Multidimensionally Poor Using Ordinal Data: A Counting Approach," OPHI Working Papers ophiwp068, Queen Elizabeth House, University of Oxford.
    4. Ezzati, Majid & Kammen, Daniel M., 2002. "The Health Impacts of Exposure to Indoor Air Pollution from Solid Fuels in Developing Countries: Knowledge, Gaps, and Data Needs," Discussion Papers 10864, Resources for the Future.
    5. Miles Corak & Michael Fertig & Marcus Tamm, 2008. "A Portrait Of Child Poverty In Germany," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 54(4), pages 547-571, December.
    6. Alkire, Sabina & Meinzen-Dick, Ruth Suseela & Peterman, Amber & Quisumbing, Agnes R. & Seymour, Greg & Vaz, Ana, 2012. "The Women’s Empowerment in Agriculture Index:," IFPRI discussion papers 1240, International Food Policy Research Institute (IFPRI).
    7. Alderman, Harold, et al, 1995. "Unitary versus Collective Models of the Household: Is It Time to Shift the Burden of Proof?," World Bank Research Observer, World Bank Group, vol. 10(1), pages 1-19, February.
    8. Anne Case & Angus Deaton, 2002. "Consumption, health, gender and poverty," Working Papers 261, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Health and Wellbeing..
    9. José Roche, 2013. "Monitoring Progress in Child Poverty Reduction: Methodological Insights and Illustration to the Case Study of Bangladesh," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 112(2), pages 363-390, June.
    10. Alkire, Sabina & Foster, James, 2011. "Counting and multidimensional poverty measurement," Journal of Public Economics, Elsevier, vol. 95(7-8), pages 476-487, August.
    11. BOSSERT, Walter & CHAKRAVARTY, Satya R. & D’AMBROSIO, Conchita, 2009. "Multidimensional Poverty and Material Deprivation," Cahiers de recherche 2009-11, Universite de Montreal, Departement de sciences economiques.
    12. Basu, Kaushik & Foster, James E, 1998. "On Measuring Literacy," Economic Journal, Royal Economic Society, vol. 108(451), pages 1733-1749, November.
    13. Stephan Klasen, 2008. "Poverty, undernutrition, and child mortality: Some inter-regional puzzles and their implicationsfor research and policy," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 6(1), pages 89-115, March.
    14. Abay Asfaw & Francesca Lamanna & Stephan Klasen, 2010. "Gender gap in parents' financing strategy for hospitalization of their children: evidence from India," Health Economics, John Wiley & Sons, Ltd., vol. 19(3), pages 265-279.
    15. Haddad, Lawrence & Kanbur, Ravi, 1990. "How Serious Is the Neglect of Intra-Household Inequality?," Economic Journal, Royal Economic Society, vol. 100(402), pages 866-881, September.
    16. Thomas Aronsson & Sven-Olov Daunfeldt & Magnus Wikström, 2001. "Estimating intrahousehold allocation in a collective model with household production," Journal of Population Economics, Springer;European Society for Population Economics, vol. 14(4), pages 569-584.
    17. Koen Decancq & Luc Van Ootegem & Elsy Verhofstadt, 2013. "What If We Voted on the Weights of a Multidimensional Well‐Being Index? An Illustration with Flemish Data," Fiscal Studies, Institute for Fiscal Studies, vol. 34, pages 315-332, September.
    18. Alkire, Sabina & Seth, Suman, 2015. "Multidimensional Poverty Reduction in India between 1999 and 2006: Where and How?," World Development, Elsevier, vol. 72(C), pages 93-108.
    19. Geoffrey R. Dunbar & Arthur Lewbel & Krishna Pendakur, 2013. "Children's Resources in Collective Households: Identification, Estimation, and an Application to Child Poverty in Malawi," American Economic Review, American Economic Association, vol. 103(1), pages 438-471, February.
    20. Hans Gersbach & Hans Haller, 2001. "Collective Decisions and Competitive Markets," Review of Economic Studies, Oxford University Press, vol. 68(2), pages 347-368.
    21. G. Hazarika, 2000. "Gender Differences in Children's Nutrition and Access to Health Care in Pakistan," Journal of Development Studies, Taylor & Francis Journals, vol. 37(1), pages 73-92, October.
    22. Ezzati, Majid & Kammen, Daniel, 2002. "The Health Impacts of Exposure to Indoor Air Pollution from Solid Fuels in Developing Countries: Knowledge, Gaps, and Data Needs," Discussion Papers dp-02-24, Resources For the Future.
    23. Dreze, Jean & Srinivasan, P. V., 1997. "Widowhood and poverty in rural India: Some inferences from household survey data," Journal of Development Economics, Elsevier, vol. 54(2), pages 217-234, December.
    24. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January.
    25. Jean-Yves DUCLOS, 2011. "UNDP’s Multidimensional poverty index," Working Papers I11, FERDI.
    26. Alkire, Sabina & Santos, Maria Emma, 2014. "Measuring Acute Poverty in the Developing World: Robustness and Scope of the Multidimensional Poverty Index," World Development, Elsevier, vol. 59(C), pages 251-274.
    27. Stephan Klasen & Claudia Wink, 2002. "A Turning Point in Gender Bias in Mortality? An Update on the Number of Missing Women," Population and Development Review, The Population Council, Inc., vol. 28(2), pages 285-312, June.
    28. Pierre-Andre Chiappori & Bernard Fortin & Guy Lacroix, 2002. "Marriage Market, Divorce Legislation, and Household Labor Supply," Journal of Political Economy, University of Chicago Press, vol. 110(1), pages 37-72, February.
    29. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-231, March.
    30. Alkire, Sabina & Meinzen-Dick, Ruth & Peterman, Amber & Quisumbing, Agnes & Seymour, Greg & Vaz, Ana, 2013. "The Women’s Empowerment in Agriculture Index," World Development, Elsevier, vol. 52(C), pages 71-91.
    31. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 437-467, June.
    32. Stephan Klasen & Claudia Wink, 2003. ""Missing Women": Revisiting The Debate," Feminist Economics, Taylor & Francis Journals, vol. 9(2-3), pages 263-299.
    33. Rosenzweig, Mark R & Schultz, T Paul, 1982. "Market Opportunities, Genetic Endowments, and Intrafamily Resource Distribution: Child Survival in Rural India," American Economic Review, American Economic Association, vol. 72(4), pages 803-815, September.
    34. Klasen, Stephan & Lechtenfeld, Tobias & Povel, Felix, 2015. "A Feminization of Vulnerability? Female Headship, Poverty, and Vulnerability in Thailand and Vietnam," World Development, Elsevier, vol. 71(C), pages 36-53.
    35. Lena Edlund & Evelyn Korn, 2002. "A Theory of Prostitution," Journal of Political Economy, University of Chicago Press, vol. 110(1), pages 181-214, February.
    36. Vijaya, Ramya M. & Lahoti, Rahul & Swaminathan, Hema, 2014. "Moving from the Household to the Individual: Multidimensional Poverty Analysis," World Development, Elsevier, vol. 59(C), pages 70-81.
    37. Jenkins, Stephen P & Lambert, Peter J, 1997. "Three 'I's of Poverty Curves, with an Analysis of UK Poverty Trends," Oxford Economic Papers, Oxford University Press, vol. 49(3), pages 317-327, July.
    38. McElroy, Marjorie B & Horney, Mary Jean, 1981. "Nash-Bargained Household Decisions: Toward a Generalization of the Theory of Demand," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(2), pages 333-349, June.
    39. Desai, Sonalde & Dubey, Amaresh & Joshi, Brij Lal & Sen, Mitali & Sharif, Abusaleh & Vanneman, Reeve, 2010. "Human Development in India: Challenges for a Society in Transition," OUP Catalogue, Oxford University Press, number 9780198065128.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Espinoza-Delgado, José & Silber, Jacques, 2018. "Multi-dimensional poverty among adults in Central America and gender differences in the three I’s of poverty: Applying inequality sensitive poverty measures with ordinal variables," MPRA Paper 88750, University Library of Munich, Germany.
    2. Espinoza-Delgado, José & Klasen, Stephan, 2018. "Gender and multidimensional poverty in Nicaragua: An individual based approach," World Development, Elsevier, vol. 110(C), pages 466-491.
    3. Philippe de Vreyer & Sylvie Lambert, 2019. "Inequality, poverty and the intra-household allocation of consumption in Senegal," PSE Working Papers halshs-02177745, HAL.
    4. Sylvie Lambert & Philippe De Vreyer, 2017. "By ignoring intra-household inequality do we underestimate the extent of poverty?," Working Papers DT/2017/05, DIAL (Développement, Institutions et Mondialisation).
    5. Sen, Sugata, 2019. "Decomposition of intra-household disparity sensitive fuzzy multi-dimensional poverty index: A study of vulnerability through Machine Learning," MPRA Paper 93550, University Library of Munich, Germany.
    6. Sylvie Lambert & Philippe De Vreyer, 2017. "By ignoring intra-household inequality do we underestimate the extent of poverty?," Working Papers DT/2017/05, DIAL (Développement, Institutions et Mondialisation).
    7. Espinoza-Delgado, José & López-Laborda, Julio, 2016. "Las tres Is de la pobreza multidimensional en Nicaragua y el diferencial de género en los primeros quince años del siglo XXI, a partir de un enfoque centrado en la persona
      [The three I’s of multidi
      ," MPRA Paper 74997, University Library of Munich, Germany.

    More about this item

    Keywords

    multi-dimensional poverty; poverty measurement; intra-household inequality; India;

    JEL classification:

    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • D1 - Microeconomics - - Household Behavior
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D6 - Microeconomics - - Welfare Economics
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:got:gotcrc:200. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dominik Noe). General contact details of provider: http://www.uni-goettingen.de/en/82144.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.