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Coherent Multidimensional Poverty Measurement

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Abstract

This paper presents a family of multidimensional poverty indices that measure poverty as a function of the extent and the intensity of poverty. I provide a unique axiomatics from which both extent and intensity of poverty can be derived, as well as the poor be endogenously identified. This axiomatics gives rise to a family of multidimensional indices whose extremal points are the geometric mean and the Maximin solution. I show that, in addition to all the standard features studied in the literature, these indices are continuous (a must for cardinal poverty measures) and ordinal, in the sense that they do not depend upon the units in which dimensions of achievements are computed. Moreover, they verify the decreasing rate marginal substitution property: the higher one's deprovation (or the extent of poverty) in one dimension, the smaller the increase of achievement in that dimension that suffices to compensate for a decrease of achievement in another dimension

Suggested Citation

  • Gaël Giraud, 2012. "Coherent Multidimensional Poverty Measurement," Documents de travail du Centre d'Economie de la Sorbonne 12095, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
  • Handle: RePEc:mse:cesdoc:12095
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    File URL: ftp://mse.univ-paris1.fr/pub/mse/CES2012/12064.pdf
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    References listed on IDEAS

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    1. Fabio Panetta & Paolo Angelini & Ugo Albertazzi & Francesco Columba & Wanda Cornacchia & Antonio Di Cesare & Andrea Pilati & Carmelo Salleo & Giovanni Santini, 2009. "Financial sector pro-cyclicality: lessons from the crisis," Questioni di Economia e Finanza (Occasional Papers) 44, Bank of Italy, Economic Research and International Relations Area.
    2. Mendoza, Enrique G. & Smith, Katherine A., 2006. "Quantitative implications of a debt-deflation theory of Sudden Stops and asset prices," Journal of International Economics, Elsevier, vol. 70(1), pages 82-114, September.
    3. John Geanakoplos & Ana Fostel, 2008. "Leverage Cycles and the Anxious Economy," American Economic Review, American Economic Association, vol. 98(4), pages 1211-1244, September.
    4. Adrian, Tobias & Shin, Hyun Song, 2010. "Liquidity and leverage," Journal of Financial Intermediation, Elsevier, vol. 19(3), pages 418-437, July.
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    More about this item

    Keywords

    Multidimensional poverty; geometric mean; maximin solution; utilitarian solution; endogenous identification; coherence; continuity; decreasing marginal rate of substitution; cardinal date; ordinality; relative weights;

    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
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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