Endogenous weights and multidimensional poverty: A cautionary tale

Indranil Dutta, Ricardo Nogales () and Gaston Yalonetzky

Journal of Development Economics, 2021, vol. 151, issue C

Abstract: Multidimensional poverty measures have become a standard feature in poverty assessments. A large and growing body of work uses endogenous (data driven) weights to compute multidimensional poverty. We demonstrate that broad classes of endogenous weights violate key properties of poverty indices such as monotonicity and subgroup consistency, without which poverty evaluation and policy targeting are seriously compromised. Using data from Ecuador and Uganda we show that these violations are widespread. Our results can be extended to other composite welfare measures such as the widely used asset indices.

Keywords: Multidimensional poverty; Endogenous weights; Measurement externalities; PCA weights; Frequency weights (search for similar items in EconPapers)
JEL-codes: C43 I32 O18 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Working Paper: Endogenous Weights and Multidimensional Poverty: A Cautionary Tale (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:151:y:2021:i:c:s0304387821000286

DOI: 10.1016/j.jdeveco.2021.102649

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