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Quantitative Approaches to Multidimensional Poverty

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Quantitative Approaches to Multidimensional Poverty Quantitative Approaches to Multidimensional Poverty Measurement Also by Nanak Kakwani and Jacques Silber: Nanak Kakwani and Jacques Silber (editors) THE MANY DIMENSIONS OF POVERTY Also by Nanak Kakwani: Nanak Kakwani (author) INCOME INEQUALITY AND POVERTY Methods of Estimation and Policy Applications Nanak Kakwani (author) ANALYZING REDISTRIBUTION POLICIES A Study Using Australian Data Also by Jacques Silber: Jacques Silber (editor) HANDBOOK ON INCOME INEQUALITY MEASUREMENT Y. Flückiger and Jacques Silber (authors) THE MEASUREMENT OF SEGREGATION IN THE LABOR FORCE Quantitative Approaches to Multidimensional Poverty Measurement Edited by Nanak Kakwani University of Sydney Former Director, International Poverty Centre, Brazil and Jacques Silber Bar-Ilan University, Israel UNDP financial support to the International Poverty Centre for holding the International Conference on ‘The Many Dimensions of Poverty’ and the preparation of the papers in this volume is gratefully acknowledged. © United Nations Development Programme (UNDP) 2008 Softcover reprint of the hardcover 1st edition 2008 978-0-230-00489-4 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2008 by PALGRAVE MACMILLAN Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N.Y. 10010 Companies and representatives throughout the world PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin’s Press, LLC and of Palgrave Macmillan Ltd. Macmillan® is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. ISBN 978-1-349-28165-7 ISBN 978-0-230-58235-4 (eBook) DOI 10.1057/9780230582354 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Quantitative approaches to multidimensional poverty measurement Edited by Nanak Kakwani and Jacques Silber. p. cm. Papers originally presented at an international conference in Brasilia on August 29–31, 2005. Includes bibliographical references and index. 1. Income distribution – Mathematical models – Congresses. 2. Poverty – Mathematical models – Congresses. I. Kakwani, Nanak. II. Silber, Jacques. HB523Q36 2007 339.4Ј6072 – dc22 2007022325 10987654321 17 16 15 14 13 12 11 10 09 08 Contents List of Tables and Figures vii Foreword xii Nora Lustig Preface xiv Nanak Kakwani List of Contributors xvi Introduction: On Quantitative Approaches to Multidimensional Poverty Measurement xviii Nanak Kakwani and Jacques Silber 1 The Information Basis of Multivariate Poverty Assesments 1 Esfandiar Maasoumi and Maria Ana Lugo 2 The Fuzzy Set Approach to Multidimensional Poverty: the Case of Italy in the 1990s 30 Gianni Betti, Bruno Cheli, Achille Lemmi and Vijay Verma 3 The Rasch Model and Multidimensional Poverty Measurement 49 Alessio Fusco and Paul Dickes 4 A Cluster Analysis of Multidimensional Poverty in Switzerland 63 Giovanni Ferro Luzzi, Yves Flückiger and Sylvain Weber 5 Multidimensional Poverty and Multiple Correspondence Analysis 80 Louis-Marie Asselin and Vu Tuan Anh 6 Income, Consumption and Permanent Income: a MIMIC Approach to Multidimensional Poverty Measurement 104 Ramses Abul Naga and Enrico Bolzani 7 Multidimensional Measures of Poverty and Well-being Based on Latent Variable Models 118 Jaya Krishnakumar 8 A Multidimensional Approach to Subjective Poverty 135 Bernard M.S. van Praag and Ada Ferrer-i-Carbonell 9 Using Efficiency Analysis to Measure Individual Well-being With an Illustration for Catalonia 155 Xavier Ramos 10 Efficiency Analysis and the Lower Convex Hull Approach 176 Gordon Anderson, Ian Crawford and Andrew Leicester v vi Contents 11 Measuring Multidimensional Poverty: The Axiomatic Approach 192 Satya R. Chakravarty and Jacques Silber 12 Determining the Parameters of Axiomatically Derived Multidimensional Poverty Indices: An Application Based on Reported Well-Being in Colombia 210 Carlos Eduardo Vélez and Marcos Robles 13 The Order of Acquisition of Durable Goods and the Measurement of Multidimensional Poverty 226 Joseph Deutsch and Jacques Silber 14 Using an Ordinal Approach to Multidimensional Poverty Analysis 244 Jean-Yves Duclos, David E. Sahn and Stephen D. Younger Index 262 List of Tables and Figures Tables 1.1 Univariate poverty measurement by regions. Indonesia, 2000 12 1.A1 Summary statistics by regions. Indonesia, 2000 21 1.A2 Correlation coefficients: Indonesia, 2000 22 1.A3 Multivariate poverty measurement by regions. Indonesia, 2000 25 2.1 Membership functions of an individual in the four intersection sets 37 2.2 Situation of a generic individual i seen in fuzzy terms 38 2.3 Joint measures of deprivation (degrees of membership of individual i of fuzzy sets corresponding to two dimensions of deprivation) 38 2.4 Longitudinal measures of interest over two time periods 40 2.5 Conventional and fuzzy cross-sectional rates of income poverty: Italy and its macro-regions 1993–2000 42 2.6 Fuzzy measures of deprivation: monetary, non-monetary, and the two forms in combination 43 2.7 Longitudinal measures: traditional vs fuzzy approach 44 3.1 Analysis of the 29 items 57 3.2 Analysis of the nine items 58 3.3 Scale of poverty 59 3.4 Analysis of the five items of ‘durable goods’ 60 3.5 Scale of durable goods 60 4.1 Descriptive statistics for the variables used in factor analysis, SHP 2001 66 4.2 Rotated factor loadings (oblique rotation), 2001 69 4.3 Statistics for determining the number of clusters 71 4.4 Mean Scores on the four Factors, by cluster, 1999–2003 71 4.5 Complementary log-log model explaining multidimensional poverty 73 4.6 Complementary log-log model explaining financial poverty (Equivalized Income less than the half of the median income) 75 4.A1 Descriptive statistics for the variables used in cloglog estimation, SHP 2001 79 5.1 MIMAP Vietnam CBMS: first set of 13 poverty indicators (1999) 91 5.2 Mean poverty indicator by province (MIMAP CBMS) 92 5.3 The eight Vietnam-CBMS indicators found in VLSS surveys 93 6.1 Summary statistics 112 6.2 Parameters estimation 113 6.3 Prediction of permanent income 113 7.1 Results of the measurement model 130 7.2 Results of the structural equation model 131 vii viii List of Tables and Figures 8.1 A simple count of domain poverties for GSOEP 1996, West workers 145 8.2 Financial satisfaction GSOEP, 1996, West-workers, COLS 146 8.3 Domain variance/correlation matrix; GSOEP 1996 West workers 147 8.4 German general satisfaction explained (GSOEP, 1996 West workers), method: POLS 148 8.A1 Health satisfaction Germany, 1996 West-workers, POLS 152 8.A2 Job satisfaction GSOEP, 1996 West-workers, POLS 152 8.A3 Housing satisfaction GSOEP, 1996 West-workers, POLS 153 8.A4 Leisure satisfaction GSOEP, 1996 West-workers, POLS 153 8.A5 Environmental satisfaction GSOEP, 1996 West-workers, POLS 154 9.1 Summary statistics of well-being dimensions and overall well-being 163 9.2 Correlations between well-being dimensions, overall well-being and income 164 9.3 OLS regressions on well-being 166 9.4 Logit marginal effects on the well-being of the poor 168 9.A1 Variables used to estimate the dimensions 174 9.A2 Summary statistics of covariates used in Table 9.3 175 10.1 Welfare measures for hypothetical households 181 10.2 Distance measures to lowest and highest welfare households 184 10.3 Summary statistics for Human Development Index data 185 10.4 Deprivation indices summary statistics 186 10.5 Dominance tests 188 11.1 Poverty measurement with the Index P␪ 204 11.2 Multidimensional poverty measurement with the index Pr 205 12.1 Self-reported well-being: Colombia, 1997, 2003 212 12.2 Income-poverty measures: Colombia, 1997–2003 213 12.3 Poverty, unemployment and wages. Colombia, urban, 1996, 2000 214 12.4 Education poverty. Colombia, 1997–2003 215 12.5 Income-poverty measures taking into account public subsidies: Colombia, 1997–2003 216 12.6 Seven standard functional forms of MDP indexes and their main characteristics 217 12.7 Multidimensional measurements of poverty: Income, education and security, Colombia, 1997–2003 220 13.1 Ownership of durable goods by gender of head of household 228 13.2 Ownership of durable goods by household size 229 13.3 Ownership of durable goods by age of head of household 229 13.4 Ownership of durable goods by marital status of head of household 230 13.5 Ownership of durable goods by year of immigration of head of household 231 List of Tables and Figures ix 13.6 Ownership of durable goods by schooling level (years of schooling) of head of household 231 13.7 Ownership of durable goods by number of months worked by
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