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Multidimensional poverty measurement and preferences

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  • Maniquet, François

    (Université catholique de Louvain, LIDAM/CORE, Belgium)

Abstract

Poverty measurement based on income or consumption fails to be consistent with welfare: a higher utility (that is, preference satisfaction) of an individual may go together with an increase in the contribution of this individual to poverty. The equivalence approach, which consists of computing the money needed to maintain a given level of utility, is the way to adjust income poverty measurement so that it becomes consistent with welfare. We review four equivalence approaches, and we compare the properties that each approach satisfies or fails to satisfy. Poverty measurement based on deprivation measures, on the other hand, cannot be adjusted to become consistent with welfare. We discuss how weights and deprivation thresholds can be designed in order to decrease the discrepancy between poverty and welfare in deprivation measures.

Suggested Citation

  • Maniquet, François, 2021. "Multidimensional poverty measurement and preferences," LIDAM Discussion Papers CORE 2021021, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2021021
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    References listed on IDEAS

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    2. Koen Decancq & Marc Fleurbaey & François Maniquet, 2019. "Multidimensional poverty measurement with individual preferences," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 17(1), pages 29-49, March.
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    Cited by:

    1. Antonio Villar, 2022. "Welfare poverty and human development," Working Papers 22.04, Universidad Pablo de Olavide, Department of Economics.

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    More about this item

    Keywords

    Multidimensional poverty measurement ; preferences ; equivalent income ; distance function ; welfare ratio ; counting approach;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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