IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/11113.html
   My bibliography  Save this paper

A Quick-Fix for Perverse Incentives Inherent in Mainstream Multidimensional Poverty Measures

Author

Listed:
  • Benoit Marie A Decerf

Abstract

Most multidimensional poverty measures used in practice, including the global Multidimensional Poverty Index, are based on the adjusted headcount ratio. This paper shows that this poverty index provides perverse incentives. Policies that minimize this index prioritize targeting the least intensely poor individuals, rather than the most intensely poor individuals. This paper proposes a quick-fix solution that tweaks the adjusted headcount ratio without affecting the identification of the poor. The resulting index satisfies the same properties as the adjusted headcount ratio, except for Dimensional Breakdown. The paper argues that this is not a sufficient reason to discard this index, by providing two examples illustrating key limitations of the decomposition across dimensions permitted by Dimensional Breakdown. This decomposition does not provide the necessary information to find optimal policies. More importantly, this decomposition may mislead policy makers on the underlying sources of progress.

Suggested Citation

  • Benoit Marie A Decerf, 2025. "A Quick-Fix for Perverse Incentives Inherent in Mainstream Multidimensional Poverty Measures," Policy Research Working Paper Series 11113, The World Bank.
    • Handle: RePEc:wbk:wbrwps:11113
    as

    Download full text from publisher

    File URL: https://documents.worldbank.org/curated/en/099407405052528815/pdf/IDU-d4e50717-7525-4da6-8359-3f67a6745944.pdf
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:11113. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.