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Multidimensional Poverty Measures from an Information Theory Perspective

  • Maria Ana Lugo

This paper proposes to use an information theory approach to the design of multidimensional poverty indices. Traditional monetary approaches to poverty rely on the strong assumption that all relevant attributes of well-being are perfectly substitutable. Based on the idea of the essentiality of some attributes, scholars have recently suggested multidimensional poverty indices where the existence of a trade-off between attributes is relevant only for individuals who are below a poverty threshold in all of them (Bourguignon and Chakravarty 2003, Tsui 2002). The present paper proposes a method which encompasses both approaches and, moreover, it opens the door to an intermediate position which allows, to a certain extent, for substitution of attributes even in the case in which one or more (but not all) dimensions are above the set threshold. An application using individual well-being data from Indonesian households in 2000 is presented in order to compare the results under the different approaches.

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Paper provided by Queen Elizabeth House, University of Oxford in its series OPHI Working Papers with number ophiwp011.

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Date of creation: May 2008
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Handle: RePEc:qeh:ophiwp:ophiwp011
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  9. Bourguignon, F. & Chakravarty, S.R., 1998. "A Family of Multidimensional Poverty Measures," DELTA Working Papers 98-03, DELTA (Ecole normale supérieure).
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  20. Jean-Yves Duclos & David Sahn & Stephen D. Younger, 2006. "Robust Multidimensional Poverty Comparisons with Discrete Indicators of Well-being," Cahiers de recherche 0628, CIRPEE.
  21. Sudhir Anand and Amartya Sen, 2000. "The Income Component of Human Development Index," Human Development Occasional Papers (1992-2007) HDOCPA-2000-01, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
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  24. Maria Ana Lugo, 2005. "Comparing Multidimensional Indices of Inequality: methods and application," Working Papers 14, ECINEQ, Society for the Study of Economic Inequality.
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  26. Kai-yuen Tsui, 2002. "Multidimensional poverty indices," Social Choice and Welfare, Springer, vol. 19(1), pages 69-93.
  27. Mussard Stéphane & Terraza Michel & Seyte Françoise, 2003. "Decomposition of Gini and the generalized entropy inequality measures," Economics Bulletin, AccessEcon, vol. 4(3), pages 1-5.
  28. Patricia Justino & Julie Litchfield & Yoko Niimi, 2004. "Multidimensional Inequality: An Empirial Application to Brazil," PRUS Working Papers 24, Poverty Research Unit at Sussex, University of Sussex.
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