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Measuring and Decomposing Inequality among the Multidimensionally Poor Using Ordinal Data: A Counting Approach

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  • Suman Seth and Sabina Alkire

Abstract

Poverty has many dimensions, which, in practice, are often binary or ordinal in nature. A number of multidimensional measures of poverty have recently been proposed that respect this ordinal nature. These measures agree that the consideration of inequality across the poor is important, which is typically captured by adjusting the poverty measure to be sensitive to inequality. This, however, comes at the cost of sacrificing certain policy-relevant properties, such as not being able to break down the measure across dimensions to understand their contributions to overall poverty. In addition, compounding inequality into a poverty measure does not necessarily create an appropriate framework for capturing disparity in poverty across population subgroups, which is crucial for effective policy. In this paper, we propose using a separate decomposable inequality measure - a positive multiple of variance - to capture inequality in deprivation counts among the poor and decompose across population subgroups. We provide two illustrations using Demographic Health Survey datasets to demonstrate how this inequality measure adds important information to the adjusted headcount ratio poverty measure in the Alkire-Foster class of measures.

Suggested Citation

  • Suman Seth and Sabina Alkire, 2014. "Measuring and Decomposing Inequality among the Multidimensionally Poor Using Ordinal Data: A Counting Approach," OPHI Working Papers ophiwp068, Queen Elizabeth House, University of Oxford.
  • Handle: RePEc:qeh:ophiwp:ophiwp068
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    Cited by:

    1. Sabina Alkire and Bouba Housseini, 2014. "Multidimensional Poverty in Sub-Saharan Africa: Levels and Trends," OPHI Working Papers ophiwp081, Queen Elizabeth House, University of Oxford.
    2. Valérie Bérenger, 2017. "The counting approach to multidimensional poverty: The case of four African countries," WIDER Working Paper Series 210, World Institute for Development Economic Research (UNU-WIDER).
    3. Stuart C. Carr & Jane Parker & James Arrowsmith & Jarrod Haar & Harvey Jones, 0. "Humanistic Management and Living Wages: a Case of Compelling Connections?," Humanistic Management Journal, Springer, vol. 0, pages 1-22.
    4. Espinoza-Delgado, Jose & Klasen, Stephan, 2017. "Gender and Multidimensional Poverty in Nicaragua, An Individual-based Approach," MPRA Paper 81907, University Library of Munich, Germany.
    5. Stephan Klasen & Rahul Lahoti, 2016. "How Serious is the Neglect of Intra-Household Inequality in Multi-dimensional Poverty Indices?," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 200, Courant Research Centre PEG.
    6. Stuart C. Carr & Jane Parker & James Arrowsmith & Jarrod Haar & Harvey Jones, 2017. "Humanistic Management and Living Wages: a Case of Compelling Connections?," Humanistic Management Journal, Springer, vol. 1(2), pages 215-236, April.
    7. Espinoza-Delgado, José & López-Laborda, Julio, 2016. "Las tres Is de la pobreza multidimensional en Nicaragua y el diferencial de género en los primeros quince años del siglo XXI, a partir de un enfoque centrado en la persona
      [The three I’s of multidi
      ," MPRA Paper 74997, University Library of Munich, Germany.

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