On Multidimensional Indices of Poverty

On Multidimensional Indices of Poverty

There has been a growing interest in what have come to be termed "multidimensional indices of poverty." Advocates for these new indices correctly point out that command over market goods is not all that matters to peoples' well-being...

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Bibliographic Details
Main Author:	Ravallion, Martin
Format:	Policy Research Working Paper
Language:	English
Published:	2012
Subjects:	ACCESS TO INFRASTRUCTURE ACCESS TO SAFE DRINKING WATER ACCESS TO SERVICES AGGREGATE POVERTY AVERAGE INCOME CHILD MORTALITY CONFLICT CONSUMPTION MEASURE CONSUMPTION POVERTY COUNTRY LEVEL DATA SETS DECOMPOSABLE POVERTY DECOMPOSABLE POVERTY MEASURES DERIVATIVES DEVELOPING COUNTRIES DEVELOPMENT GOALS DEVELOPMENT POLICY DEVELOPMENT RESEARCH DIMENSIONS OF POVERTY DISTRIBUTION FUNCTION ECONOMIC PERFORMANCE ECONOMIC STUDIES ECONOMICS EDUCATION POVERTY EXPENDITURE EXPENDITURES FUNCTIONAL FORM HIGH INFLATION HOLDING HOUSEHOLD BUDGET HOUSEHOLD CONSUMPTION HOUSEHOLD SIZE HUMAN DEVELOPMENT HUMAN DEVELOPMENT INDEX HUMAN DEVELOPMENT REPORT INCIDENCE OF POVERTY INCOME INCOME POVERTY INEQUALITY INFLATION INTERNATIONAL BANK INTRINSIC VALUE LIVING STANDARDS MALNUTRITION MARKET DISTORTIONS MARKET ECONOMY MARKET PRICES MEASUREMENT OF POVERTY MEASURING POVERTY NONMARKET GOODS NUTRITION POLICY MAKERS POLICY RESEARCH POOR POOR HOUSEHOLDS POOR PEOPLE POVERTY ASSESSMENTS POVERTY COMPARISONS POVERTY INDICES POVERTY LEVEL POVERTY LINE POVERTY LINES POVERTY MEASURE POVERTY MEASUREMENT POVERTY MEASURES POVERTY MONITORING EFFORTS POVERTY REDUCTION POVERTY REDUCTION STRATEGY POVERTY REDUCTION STRATEGY PAPERS PRICE INDICES RELATIVE PRICES SCHOOLING SHADOW PRICE SHADOW PRICES SUBSTITUTION TRANSFER PAYMENT VALUATION
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110228142416 http://hdl.handle.net/10986/3346

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Summary:	There has been a growing interest in what have come to be termed "multidimensional indices of poverty." Advocates for these new indices correctly point out that command over market goods is not all that matters to peoples' well-being, and that other factors need to be considered when quantifying the extent of poverty and informing policy making for fighting poverty. However, the author argues that there are two poorly understood issues in assessing these indices. First, does one believe that any single index can ever be a sufficient statistic for poverty assessments? Second, when aggregation is called for, should it be done in the space of "attainments," using prices when appropriate, or that of "deprivations," using weights set by the analyst? The paper argues that the goal for future poverty monitoring efforts should be to develop a credible set of multiple indices, spanning the dimensions of poverty most relevant to a specific setting, rather than a single multidimensional index. When weights are needed, they shouldn't be set solely by an analyst measuring poverty. Rather, they should be, as much as possible, consistent with well-informed choices made by poor people.