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Multidimensional poverty measurement with individual preferences

Author

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  • Koen Decancq
  • Marc Fleurbaey
  • François Maniquet
Abstract
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.
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Suggested Citation

  • Koen Decancq & Marc Fleurbaey & François Maniquet, 2019. "Multidimensional poverty measurement with individual preferences," LIDAM Reprints CORE 3036, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvrp:3036
    Note: In : The Journal of Economic Inequality, 17, 29-49, 2019
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    More about this item

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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