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Multidimensional Poverty Rankings based on Pareto Principle: A Practical Extension

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  • Maki Michinaka
  • Takahiro Ito

Abstract

This paper proposes a ranking method of multidimensional poverty and extends it aiming to enhance its practical utility. While our original ranking method that assumes non-comparability among different dimensions of poverty succeeds in eliminating some implicit arbitrariness in existing ranking, it also confronts a disadvantage that a non- negligible number of objectives (countries) are ranked at the same level. In order to improve this disadvantage, we propose an extended ranking method, where we allow the data to have a certain range of bandwidth. The introduction of bandwidth improves the usefulness of our ranking in the sense that it decreases the number of countries with the same rank. In addition, a simulation exercise shows that this extension also improves the robustness of the ranking against measurement errors.

Suggested Citation

  • Maki Michinaka & Takahiro Ito, 2010. "Multidimensional Poverty Rankings based on Pareto Principle: A Practical Extension," Global COE Hi-Stat Discussion Paper Series gd10-139, Institute of Economic Research, Hitotsubashi University.
  • Handle: RePEc:hst:ghsdps:gd10-139
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    References listed on IDEAS

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    1. Achille Lemmi & Gianni Betti (ed.), 2006. "Fuzzy Set Approach to Multidimensional Poverty Measurement," Economic Studies in Inequality, Social Exclusion, and Well-Being, Springer, number 978-0-387-34251-1, Fall.
    2. Gianni Betti & Bruno Cheli & Achille Lemmi & Vijay Verma, 2008. "The Fuzzy Set Approach to Multidimensional Poverty: the Case of Italy in the 1990s," Palgrave Macmillan Books, in: Nanak Kakwani & Jacques Silber (ed.), Quantitative Approaches to Multidimensional Poverty Measurement, chapter 2, pages 30-48, Palgrave Macmillan.
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    5. Krishnakumar, Jaya & Ballon, Paola, 2008. "Estimating Basic Capabilities: A Structural Equation Model Applied to Bolivia," World Development, Elsevier, vol. 36(6), pages 992-1010, June.
    6. Louis-Marie Asselin, 2009. "Analysis of Multidimensional Poverty," Economic Studies in Inequality, Social Exclusion, and Well-Being, Springer, edition 1, number 978-1-4419-0843-8, Fall.
    7. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-231, March.
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    9. Carlos Eduardo Vélez & Marcos Robles, 2008. "Determining the Parameters of Axiomatically Derived Multidimensional Poverty Indices: An Application Based on Reported Well-Being in Colombia," Palgrave Macmillan Books, in: Nanak Kakwani & Jacques Silber (ed.), Quantitative Approaches to Multidimensional Poverty Measurement, chapter 12, pages 210-225, Palgrave Macmillan.
    10. Nanak Kakwani & Jacques Silber (ed.), 2008. "Quantitative Approaches to Multidimensional Poverty Measurement," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-58235-4, December.
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    1. Maki Michinaka, 2011. "Human Development Rankings Based on the Pareto Dominance: Illustrations Using Cross-country Panel Data 1980-2007," Global COE Hi-Stat Discussion Paper Series gd11-188, Institute of Economic Research, Hitotsubashi University.

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