IDEAS home Printed from https://ideas.repec.org/a/spr/joecin/v20y2022i4d10.1007_s10888-022-09531-z.html
   My bibliography  Save this article

The regression approach to the measurement and decomposition of the multidimensional Watts poverty index

Author

Listed:
  • Tomson Ogwang

    (Brock University)

Abstract

In this paper, we exploit the simplification associated with the regression approach for purposes of computing and decomposing the multidimensional Watts poverty index (MWPI) when the dimensions are expressed in terms of measurable achievements. It turns out that MWPI can be conveniently estimated by specifying an underlying system of Seemingly Unrelated Regressions linking the various poverty dimensions. The resulting decompositions turn out to be consistent with the 3 i’s of multidimensional poverty (i.e., incidence, intensity and inequality), augmented with poor population shares (in the unweighted dimensions case) and the product of poor population shares and poverty dimension weights (in the weighted dimensions case). Additional modifications to reflect the Alkire-Foster dual cut-off poor-group membership identification strategy are also discussed. An illustrative example using Canadian 2016 census data is provided together with a new proposal for choosing the best weights for the poverty dimensions among some competing alternatives.

Suggested Citation

  • Tomson Ogwang, 2022. "The regression approach to the measurement and decomposition of the multidimensional Watts poverty index," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 20(4), pages 951-973, December.
    • Handle: RePEc:spr:joecin:v:20:y:2022:i:4:d:10.1007_s10888-022-09531-z
    DOI: 10.1007/s10888-022-09531-z
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10888-022-09531-z
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10888-022-09531-z?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Dutta, Indranil & Nogales, Ricardo & Yalonetzky, Gaston, 2021. "Endogenous weights and multidimensional poverty: A cautionary tale," Journal of Development Economics, Elsevier, vol. 151(C).
    2. Danilo Cavapozzi & Wei Han & Raffaele Miniaci, 2015. "Alternative weighting structures for multidimensional poverty assessment," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 13(3), pages 425-447, September.
    3. Selvanathan, E A, 1989. "A Note on the Stochastic Approach to Index Numbers," Journal of Business & Economic Statistics, American Statistical Association, vol. 7(4), pages 471-474, October.
    4. Christophe Muller, 2001. "The Properties of the Watts Poverty Index under Lognormality," Economics Bulletin, AccessEcon, vol. 9(1), pages 1-9.
    5. Wan, Guang H & Griffiths, William E & Anderson, Jock R, 1992. "Using Panel Data to Estimate Risk Effects in Seemingly Unrelated Production Functions," Empirical Economics, Springer, vol. 17(1), pages 35-49.
    6. Valérie Berenger, 2019. "The counting approach to multidimensional poverty. The case of four African countries," South African Journal of Economics, Economic Society of South Africa, vol. 87(2), pages 200-227, June.
    7. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    8. Alkire, Sabina & Oldiges, Christian & Kanagaratnam, Usha, 2021. "Examining multidimensional poverty reduction in India 2005/6–2015/16: Insights and oversights of the headcount ratio," World Development, Elsevier, vol. 142(C).
    9. Martin Ravallion, 2011. "On multidimensional indices of poverty," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(2), pages 235-248, June.
    10. Sami Bibi & Abdel Rahmen El Lahga, 2008. "Robust Ordinal Comparisons of Multidimensional Poverty Between South Africa and Egypt," Revue d’économie du développement, De Boeck Université, vol. 16(5), pages 37-65.
    11. James Foster & Joel Greer & Erik Thorbecke, 2010. "The Foster–Greer–Thorbecke (FGT) poverty measures: 25 years later," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 8(4), pages 491-524, December.
    12. Francisco H. G. Ferreira & Maria Ana Lugo, 2013. "Multidimensional Poverty Analysis: Looking for a Middle Ground," The World Bank Research Observer, World Bank, vol. 28(2), pages 220-235, August.
    13. Chakravarty, Satya R. & Deutsch, Joseph & Silber, Jacques, 2008. "On the Watts Multidimensional Poverty Index and its Decomposition," World Development, Elsevier, vol. 36(6), pages 1067-1077, June.
    14. Ogwang, Tomson, 1995. "The stochastic approach to price index numbers: An expository note," Economics Letters, Elsevier, vol. 49(4), pages 373-379, October.
    15. François Bourguignon & Satya R. Chakravarty, 2019. "The Measurement of Multidimensional Poverty," Themes in Economics, in: Satya R. Chakravarty (ed.), Poverty, Social Exclusion and Stochastic Dominance, pages 83-107, Springer.
    16. Osnat Israeli & Michal Weber, 2011. "On the contribution of the three I's of poverty to chronic and transitory poverty," Economics Bulletin, AccessEcon, vol. 31(2), pages 1496-1508.
    17. Joseph Deutsch & Jacques Silber, 2005. "Measuring Multidimensional Poverty: An Empirical Comparison Of Various Approaches," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 51(1), pages 145-174, March.
    18. repec:bla:jecsur:v:11:y:1997:i:2:p:123-62 is not listed on IDEAS
    19. Tomson Ogwang, 2000. "A Convenient Method of Computing the Gini Index and its Standard Error," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 62(1), pages 123-129, February.
    20. Sabina Alkire & Maria Santos, 2013. "A Multidimensional Approach: Poverty Measurement & Beyond," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 112(2), pages 239-257, June.
    21. Ravallion, Martin & Chen, Shaohua, 2003. "Measuring pro-poor growth," Economics Letters, Elsevier, vol. 78(1), pages 93-99, January.
    22. Koen Decancq & María Ana Lugo, 2013. "Weights in Multidimensional Indices of Wellbeing: An Overview," Econometric Reviews, Taylor & Francis Journals, vol. 32(1), pages 7-34, January.
    23. Buhong Zheng, 1997. "Aggregate Poverty Measures," Journal of Economic Surveys, Wiley Blackwell, vol. 11(2), pages 123-162, June.
    24. Ogwang Tomson, 2014. "A Convenient Method of Decomposing the Gini Index by Population Subgroups," Journal of Official Statistics, Sciendo, vol. 30(1), pages 91-105, March.
    25. Erkan Erdil, 2006. "Demand systems for agricultural products in OECD countries," Applied Economics Letters, Taylor & Francis Journals, vol. 13(3), pages 163-169.
    26. Ogwang, Tomson, 2007. "Additional properties of a linear pen's parade for individual data using the stochastic approach to the Gini index," Economics Letters, Elsevier, vol. 96(3), pages 369-374, September.
    27. N. P. Ravindra Deyshappriya & Simon Feeny, 2021. "Weighting the Dimensions of the Multidimensional Poverty Index: Findings from Sri Lanka," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 156(1), pages 1-19, July.
    28. Alkire, Sabina & Santos, Maria Emma, 2014. "Measuring Acute Poverty in the Developing World: Robustness and Scope of the Multidimensional Poverty Index," World Development, Elsevier, vol. 59(C), pages 251-274.
    29. Belhadj, Besma, 2012. "New weighting scheme for the dimensions in multidimensional poverty indices," Economics Letters, Elsevier, vol. 116(3), pages 304-307.
    30. Morduch, Jonathan, 1998. "Poverty, economic growth, and average exit time," Economics Letters, Elsevier, vol. 59(3), pages 385-390, June.
    31. Kai-yuen Tsui, 2002. "Multidimensional poverty indices," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 19(1), pages 69-93.
    32. Valérie Bérenger, 2017. "Using ordinal variables to measure multidimensional poverty in Egypt and Jordan," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 15(2), pages 143-173, June.
    33. Valérie Bérenger, 2017. "Using ordinal variables to measure multidimensional poverty in Egypt and Jordan," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 15(2), pages 143-173, June.
    34. Lucio Esposito & Enrica Chiappero‐Martinetti, 2019. "Eliciting, Applying And Exploring Multidimensional Welfare Weights: Evidence From The Field," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 65(S1), pages 204-227, November.
    35. Pinar, Mehmet & Stengos, Thanasis & Topaloglou, Nikolas, 2020. "On the construction of a feasible range of multidimensional poverty under benchmark weight uncertainty," European Journal of Operational Research, Elsevier, vol. 281(2), pages 415-427.
    36. Dwivedi, T. D. & Srivastava, V. K., 1978. "Optimality of least squares in the seemingly unrelated regression equation model," Journal of Econometrics, Elsevier, vol. 7(3), pages 391-395, April.
    37. Blackburn, McKinley L, 1989. "Poverty Measurement: An Index Related to a Theil Measure of Inequality," Journal of Business & Economic Statistics, American Statistical Association, vol. 7(4), pages 475-481, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tomson Ogwang, 2022. "The Foster–Greer–Thorbecke Poverty Measures Reveal More," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 164(3), pages 1481-1503, December.
    2. Tomson Ogwang & Jean-François Lamarche, 2024. "Hybrid measures of multidimensional poverty," Empirical Economics, Springer, vol. 67(3), pages 1211-1233, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Espinoza-Delgado, José & Klasen, Stephan, 2018. "Gender and multidimensional poverty in Nicaragua: An individual based approach," World Development, Elsevier, vol. 110(C), pages 466-491.
    2. Rolf Aaberge & Andrea Brandolini, 2014. "Multidimensional poverty and inequality," Temi di discussione (Economic working papers) 976, Bank of Italy, Economic Research and International Relations Area.
    3. Daniel Nowak & Christoph Scheicher, 2017. "Considering the Extremely Poor: Multidimensional Poverty Measurement for Germany," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 133(1), pages 139-162, August.
    4. Burhan Can Karahasan & Fırat Bilgel, 2021. "The Topography and Sources of Multidimensional Poverty in Turkey," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 154(2), pages 413-445, April.
    5. Mario Biggeri & Jose Antonio Cuesta, 2021. "An Integrated Framework for Child Poverty and Well-Being Measurement: Reconciling Theories," Child Indicators Research, Springer;The International Society of Child Indicators (ISCI), vol. 14(2), pages 821-846, April.
    6. Aysenur Acar, 2014. "The Dynamics of Multidimensional Poverty in Turkey," Working Papers 014, Bahcesehir University, Betam.
    7. Mekonnen Bersisa & Almas Heshmati, 2021. "A Distributional Analysis of Uni-and Multidimensional Poverty and Inequalities in Ethiopia," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 155(3), pages 805-835, June.
    8. Sabina Alkire & Yingfeng Fang, 2019. "Dynamics of Multidimensional Poverty and Uni-dimensional Income Poverty: An Evidence of Stability Analysis from China," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 142(1), pages 25-64, February.
    9. Sabina Alkire & James Foster, 2011. "Understandings and misunderstandings of multidimensional poverty measurement," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(2), pages 289-314, June.
    10. Wulung Hanandita & Gindo Tampubolon, 2016. "Multidimensional Poverty in Indonesia: Trend Over the Last Decade (2003–2013)," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 128(2), pages 559-587, September.
    11. Tomson Ogwang & Jean-François Lamarche, 2024. "Hybrid measures of multidimensional poverty," Empirical Economics, Springer, vol. 67(3), pages 1211-1233, September.
    12. Gallardo, Mauricio, 2022. "Measuring vulnerability to multidimensional poverty with Bayesian network classifiers," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 492-512.
    13. José Roche, 2013. "Monitoring Progress in Child Poverty Reduction: Methodological Insights and Illustration to the Case Study of Bangladesh," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 112(2), pages 363-390, June.
    14. Guo, Junping & Qu, Song & Zhu, Tiehui, 2022. "Estimating China’s relative and multidimensional Poverty: Evidence from micro-level data of 6145 rural households," World Development Perspectives, Elsevier, vol. 26(C).
    15. 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.
    16. Paolo Liberati & Giuliano Resce & Francesca Tosi, 2023. "The probability of multidimensional poverty: A new approach and an empirical application to EU‐SILC data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 69(3), pages 668-700, September.
    17. Deniz Sevinc, 2020. "How Poor is Poor? A novel look at multidimensional poverty in the UK," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 149(3), pages 833-859, June.
    18. Guo, Junping & Qu, Song, 2021. "Multidimensional and Relative Poverty in Rural China: Evidence from Micro-Level Data of 6145 Households," 2021 Conference, August 17-31, 2021, Virtual 315040, International Association of Agricultural Economists.
    19. Yadira Diaz, 2015. "Differences in needs and multidimensional deprivation measurement," Working Papers 387, ECINEQ, Society for the Study of Economic Inequality.
    20. Espinoza-Delgado, José & Silber, Jacques, 2018. "Multi-dimensional poverty among adults in Central America and gender differences in the three I’s of poverty: Applying inequality sensitive poverty measures with ordinal variables," MPRA Paper 88750, University Library of Munich, Germany.

    More about this item

    Keywords

    Multidimensional Watts poverty index; Multidimensional poverty index; Multidimensional poverty decomposition; Dual cut-off method; Seemingly unrelated regressions; Headcount ratio;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

    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:spr:joecin:v:20:y:2022:i:4:d:10.1007_s10888-022-09531-z. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.