Welfare poverty and human development

This paper proposes an approach to poverty measurement based on the interpretation of poverty as a welfare loss. A multidimensional poverty index is derived here from a social evaluation function and a vector of poverty thresholds. A welfare poverty index is defined as the relative welfare loss due to the insufficient welfare of those agents whose achievements do not reach the minimum established. Under standard assumptions, this index can be expressed as the product of the incidence and the intensity of poverty. We include an application to the measurement of poverty among the countries that appear in the last Human Development Report, using the variables that conform the Human Development Index.