Multidimensional poverty measurement with individual preferences
Koen Decancq (),
Marc Fleurbeay () and
Francois Maniquet ()
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Marc Fleurbeay: Princeton University
No 2015008, CORE Discussion Papers from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)
We propose a new class of multidimensional poverty indices. To aggregate and weight the different dimensions of poverty, we rely on the preferences of the concerned agents rather than on an arbitrary weighting scheme selected by the analyst. The Pareto principle is, therefore, satisfied among the poor. The indices add up individual measures of poverty that are computed as a convex transform of the fraction of the poverty line vector to which the agent is indifferent. The axiomatic characterization of this class is grounded on new principles of interpersonal poverty comparisons and of inequality aversion among the poor. 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 and in subgroup poverty comparisons.
Keywords: multidimensional poverty measurement; preferences (search for similar items in EconPapers)
JEL-codes: D63 D71 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cis, nep-tra and nep-upt
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Working Paper: Multidimensional poverty measurement with individual preferences (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2015008
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