Identifying the Multidimensional Poor in Developed Countries Using Relative Thresholds: An Application to Spanish Data

Abstract

In order to contribute to providing a methodology to ensure objectivity and transparency in the measurement of multidimensional poverty, this paper proposes a new threshold for the identification of the multidimensional poor which is also applicable to each of the dimensions of poverty, suitable for identifying the severely poor in developed countries. This new methodology is applied to analyse the evolution of material deprivation in Spain during the period of economic crisis, comparing the results with those obtained using other traditional approaches.Key words: Multidimensional poverty, counting approach, poverty lines, Spain. 2 IntroductionIn recent decades, a broad academic and institutional consensus has emerged regarding the need to study poverty as a multidimensional phenomenon, integrating material deprivation and social exclusion concerns (Sen 1985) in aggregated indicators. However, despite this consensus, there are still many methodological issues when measuring multidimensional poverty that are imbued with subjectivity and a lack of transparency. Among other negative outcomes, this prevents international comparisons from being conducted. In order to construct an objective methodology for measuring severe multidimensional poverty and deprivation, in this paper, a new relative threshold for identifying multidimensional poor or deprived segments is proposed especially suited for developed countries. Using this new threshold, we have quantified and analysed the evolution of material deprivation in Spain during the economic crisis, comparing the results with those obtained using absolute and subjective thresholds proposed in the literature by other authors. order to quantify the level of poverty. In this approach, a set of highly empirical contributions summarises information of all the dimensions in a single variable using multivariate statistical methods (Townsend 1979;Desai and Shah 1988; Guio et al. 2009;Ayala, et al. 2011).Another set of contributions, which take into account the joint distribution of the poverty dimensions, has focused on the proposal of poverty indices that combine information on several dimensions (Bourguignon and Chakravarty 2003; Lemmi and Betti 2006;Foster 2007 and2011a). These contributions include those based on the counting approach, introducedby Atkinson (2003) and are suitable for both qualitative and quantitative variables. This approach, which concentrates on counting the number of dimensions in which people suffer poverty or deprivation, helps overcome the disadvantages of most of the measures that can only be calculated for quantitative variables.Within the framework of the counting approach, Foster (2007 and2011a) propose a methodology, connected with the one-dimensional analysis of the phenomenon, that relies on a method for identifying the poor or deprived and another for aggregating the data and summarising the information on multiple dimensions in one scalar. The identification method, known as dual cutoff, can be based on two kinds of thresholds. The fir...

Variables, Dimensions, and Indicators Important to Develop the Multidimensional Poverty Line Measurement in Indonesia

“…The above one-dimensional method is criticized by many scholars (see, for instance, Anand et al, 2009 ; Artha & Dartanto, 2018 ; ADB 2014 ; Garcia-Perez et al 2017 ; Ke-Mei & Te-Mu, 2019 ; Kingdon & Knight, 2004 ; Li et al, 2019 ; Pomati & Nandy, 2020 ; Ravallion, 1992 ; Sen, 1999 ; Tsui, 2002 ; World Bank, 2001 ) as well as by the poor themselves in Indonesia (Asra, 2011 ; Firdausy, 2017 , 2020 ).…”

“…The above criticism leads to further suggestions advanced in the literature to the use of the multidimensional poverty measurement including the multidimensional poverty Indices-MPI 1 (see, for instance, Alkire & Santos, 2010 , 2013 ; Alkire & Summer, 2013 ; Alsop & Heinsohn, 2005 ; Clark, 2005 ; Garcia-Perez et al, 2017 ; Ke-Mei et al, 2019 ; Li et al, 2019 ; Lustig & Stern, 2000 ; Pomati & Nandy, 2020 ; Sen, 1999 ; Van Praag & Carbonel, 2006 ; World Bank, 2001 ).…”

A Multidimensional Approach to Measuring Economic Insecurity: The Case of Chile

“… 14 It is worth mentioning that Alkire & Foster ( 2011 ) MPI has been calculated in 104 countries to identify multiple deprivations at the household level (Alkire & Santos, 2014 ), and their adjusted headcount ratio has been used in other multidimensional concepts such as job quality. For instance, García-Pérez et al, ( 2017a , 2017b ) for Spain and Sehnbruch et al ( 2020 ) for nine Latin American countries. …”

“… 15 Cantó et al ( 2020 ) research is based on the Romaguera de la Cruz ( 2020 ) work who built an economic insecurity index using an adaptation of Alkire & Foster’s ( 2011 ) model proposed by García-Pérez et al, ( 2017a , b ). …”