Multidimensional povertymeasurement with individual preferences

TitleMultidimensional povertymeasurement with individual preferences
Publication TypeMagazine Article
Year of Publication2019
AuthorsDecancq, K., Fleurbaey M., & Maniquet F.
MagazineThe Journal of Economic Inequality
Date Published03/19
PublisherHerman Deleeck Centre for Social Policy
KeywordsMultidimensional poverty measurement · Preferences

We propose a new approach to multidimensional poverty measurement. To aggregate and
weight the different dimensions of poverty, we rely on the preferences of the concerned individuals
rather than on an arbitrary weighting scheme selected by the analyst.We provide an
axiomatic characterization of an approach in which multidimensional poverty measures add
up individual indices of poverty based on their multidimensional outcomes and their preferences.
We discuss two families of these individual indices of poverty: quantity metrics and
money metrics. Members of the first family evaluate individual poverty by the fraction of
the poverty line vector to which the individual is indifferent. The second family considers
the ratio between the income to which the individual is indifferent, for some fixed price vector,
and the money value of the poverty line vector. We illustrate our approach with Russian
survey data between 1995 and 2005.We find that, compared to standard poverty indices, our
preference-sensitive indices lead to considerable differences in the identification of the poor.

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