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From income poverty to multidimensional poverty—an international comparison

Author

Listed:
  • Francesco Burchi

    (IPC-IG)

  • Nicole Rippin

    (IPC-IG)

  • Claudio E. Montenegro

    (IPC-IG)

Abstract

The United Nations 2030 Agenda for Sustainable Development clearly recognizes that poverty is more than just the lack of a sufficient amount of income. However, some scholars argue that an income-based measure of poverty can sufficiently capture poverty in other dimensions. Unfortunately, the available international indicators of multidimensional poverty suffer from several weaknesses and cannot be directly compared with monetary measures of poverty. This paper provides two main contributions to the literature on poverty measurement and analysis. First, it proposes a theoretically and methodologically sound indicator of multidimensional poverty, called the Global Correlation Sensitive Poverty Index (G-CSPI), which addresses most of the problems present in other poverty indicators. Thanks to the massive I2D2 database of harmonized household surveys, the G-CSPI was calculated for more than 500 surveys, and the results show that it is stable and robust. Second, for the first time we were able to conduct a comparative analysis between income and multidimensional poverty, relying on the same dataset to calculate both. Previous cross-country evidence was based on very different surveys used for the computation of income and multidimensional poverty and even conducted in different years. Building on recent data for 92 countries, our analysis shows that the headcount ratio of extreme monetary poverty (USD1.90) is highly correlated with that of the G-CSPI, but that the relationship is clearly non-linear. Thus, we provided the first empirical evidence of the fact that income poverty is not a sufficiently good proxy for multidimensional poverty.
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Suggested Citation

  • Francesco Burchi & Nicole Rippin & Claudio E. Montenegro, 2018. "From income poverty to multidimensional poverty—an international comparison," One Pager 400, International Policy Centre for Inclusive Growth.
    • Handle: RePEc:ipc:opager:400
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    3. Belete, Getachew Yirga, 2021. "Multidimensional Poverty and Inequality in Urban Ethiopia," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 30(01), April.
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    6. Sabina Alkire & Usha Kanagaratnam & Ricardo Nogales & Nicolai Suppa, 2022. "Revising the Global Multidimensional Poverty Index: Empirical Insights and Robustness," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(S2), pages 347-384, December.
    7. Getachew Yirga Belete, 2022. "Children’s multidimensional deprivation, monetary poverty and undernutrition in Ethiopia," Review of Economics of the Household, Springer, vol. 20(4), pages 1087-1118, December.
    8. Francesco Burchi & Daniele Malerba & Claudio E. Montenegro & Nicole Rippin, 2022. "Assessing Trends in Multidimensional Poverty During the MDGs," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(S2), pages 317-346, December.
    9. Francesco Burchi & Pasquale Muro & Eszter Kollar, 2018. "Constructing Well-Being and Poverty Dimensions on Political Grounds," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 137(2), pages 441-462, June.
    10. Burchi, Francesco & Malerba, Daniele & Rippin, Nicole & Montenegro, Claudio E., 2019. "Comparing global trends in multidimensional and income poverty and assessing horizontal inequalities," IDOS Discussion Papers 2/2019, German Institute of Development and Sustainability (IDOS).
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    Keywords

    Income; poverty; multidimensional; international; comparison;
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