Did Poverty Reduction Reach the Poorest of the Poor? Complementary Measures of Poverty and Inequality in the Counting Approach

Abstract

A number of multidimensional poverty measures that respect the ordinal nature of dimensions have recently been proposed within the counting approach framework. Besides ensuring a reduction in poverty, however, it is important to monitor distributional changes to ensure that poverty reduction has been inclusive in reaching the poorest. Distributional issues are typically captured by adjusting a poverty measure to be sensitive to inequality among the poor. This approach, however, has certain practical and conceptual limitations. It conflicts, for example, with some policy-relevant measurement features, such as the ability to decompose a measure into dimensions post-identification and does not create an appropriate framework for assessing disparity in poverty across population subgroups. In this chapter, we propose and justify the use of a separate decomposable inequality measure – a positive multiple of “variance” – to capture the distribution of deprivations among the poor and to assess disparity in poverty across population subgroups. We demonstrate the applicability of our approach through two contrasting inter-temporal illustrations using Demographic Health Survey data sets for Haiti and India.

Citation

Seth, S. and Alkire, S. (2017), "Did Poverty Reduction Reach the Poorest of the Poor? Complementary Measures of Poverty and Inequality in the Counting Approach", Bandyopadhyay, S. (Ed.) Research on Economic Inequality (Research on Economic Inequality, Vol. 25), Emerald Publishing Limited, Bingley, pp. 63-102. https://doi.org/10.1108/S1049-258520170000025005