Differentiating Between Dimensionality and Duration in Multidimensional Measures of Poverty: Methodology with an Application to China

We develop a multidimensional poverty measure that is sensitive to the within‐individual distribution of deprivations across dimensions and time. Our measure combines features from a static multidimensional measure (Alkire and Foster, 2011a ) and a time‐dependent unidimensional measure (Foster, 2009 ). The proposed measure separately identifies—and can therefore be decomposed according to—the proportion of the poverty score attributable to: (i) the concentration of deprivations within periods; (ii) the concentration of deprivations within dimensions. In doing so it allows for a poverty ranking that is robust to assumptions about the trade‐off between the two components. Previous measures have not allowed for the features proposed here due to the inability to calculate the exact contribution of each dimension to overall poverty. We overcome this by adapting to our measure the Shapley decomposition proposed in Shorrocks ( 2013 ) (based on Shapley, 1953 ). The measure is applied to data from China, 2000‐2011.     

Multidimensional Poverty and Material Deprivation with Discrete Data

We propose a characterization of a popular index of multidimensional poverty which, as a special case, generates a measure of material deprivation. This index is the weighted sum of the functioning failures. The important feature of the variables that may be relevant for poverty assessments is that they are discrete in nature. Thus, poverty measures based on continuous variables are not suitable in this setting and the assumption of a discrete domain is mandatory. We apply the measure to European Union member states where the concept of material deprivation was initiated and illustrate how its recommendations differ from those obtained from poverty measures based exclusively on income considerations.     

PARETO HONOURING POVERTY REDUCTION

Policy reforms often pit the poor against the poor by triggering a fall in poverty for some but an increase in poverty for others. Aggregated national measures gloss over these fine patterns and pronounce ‘a reduction in poverty’– is such aggregation across poor individuals ethically permissible? Addressing this type of aggregation is a hard issue. This paper has made an attempt in that direction by outlining an axiomatically grounded aggregate measure of such gains or losses, duly giving more importance to the losses to a poor compared to the gains of another poor.     

中国多维贫困的动态测算、结构分解与精准扶贫

贫困的多维福利剥夺程度高低和持续时间长短是近年来理论界关注的焦点,也是政府制定精准扶贫政策的重要理论依据.文章综合Alkire和Foster(2011)提出的多维贫困测算方法和Foster(2009)提出的长期贫困测算方法,构建了长期多维贫困指数和暂时多维贫困指数,实证分析了中国的贫困状况,并进行了城乡分解、指标分解和区域分解.结果发现:第一,样本家庭在多维视角下的长期贫困比例要高于暂时贫困,这与单一地从收入角度来分析长期贫困和暂时贫困的结论恰好相反;第二,对于所有类型的贫困而言,教育年限、医疗保险和健康的贡献度都排在前三位,但健康对于长期贫困人口的贡献度要明显高于暂时贫困;第三,总体看来,农村的多维贫困程度不仅高于城市,而且很多指标的贫困持续时间也要高于城市;第四,从四大区域看,经济发展水平较低的中西部地区,长期多维贫困程度要高于东部和东北部地区.     

A SHAPLEY DECOMPOSITION OF MULTIDIMENSIONAL CHRONIC POVERTY IN ARGENTINA

This paper proposes a Shapley decomposition to analyse the evolution of chronic poverty in a multivariate setting using a chronic poverty measure proposed by Alkire and colleagues. The decomposition makes possible to assess a vast array of information to find the drivers of change in chronic poverty, and could be a valuable tool in the way public policy programmes focus resources. We present an empirical application of the changes in chronic poverty in Argentina during the period 2004–12 using the Permanent Household Survey. We found that households with older adults show great persistence of multidimensional chronic poverty in time while the employment indicators is found to be an important driver of the intensity of chronic poverty.     

More Relatively‐Poor People in a Less Absolutely‐Poor World

Relative deprivation, shame, and social exclusion can matter to the welfare of people everywhere. The paper argues that such social effects on welfare call for a reconsideration of how we assess global poverty. We argue for using a weakly‐relative measure as the upper‐bound complement to the lower‐bound provided by a standard absolute measure. New estimates of poverty are presented. The absolute line is $1.25 a day at 2005 prices, while the relative line rises with the mean, at a gradient of 1:2 above $1.25 a day, consistently with national poverty lines. We find that the incidence of both absolute and weakly‐relative poverty in the developing world has been falling since the 1990s, but more slowly for the relative measure. While the number of absolutely poor has fallen, the number of relatively poor has changed little since the 1990s, and is higher in 2008 than 1981.     

THE IMPORTANCE OF CONSECUTIVE SPELLS OF POVERTY: A PATH‐DEPENDENT INDEX OF LONGITUDINAL POVERTY

In this paper we propose a new index of individual poverty in the longitudinal perspective, taking into account the way poverty and non‐poverty spells follow one another along individual life courses. The Poverty Persistence Index (PPI) is based on all the pairwise distances between the waves of poverty. The PPI is normalized and it assigns a higher degree of (longitudinal) poverty to people who experience poverty in consecutive, rather than separated, periods, for whom the distances from the poverty line are larger along time and moreover, when the worst years are consecutive and/or recent. We also propose an aggregate index of persistence in poverty (APPI) in order to measure the distribution of the persistence of poverty in a society, and evaluate at once the diffusion of poverty, its depth, duration, and recentness. The indices are tested in comparison with other measures from the literature both at the individual as well as at the societal level.     

HETEROGENEITY OR TRUE STATE DEPENDENCE IN POVERTY: THE TALE TOLD BY TWINS

The purpose of this study is to distinguish between two different reasons that poverty could persist on an individual level. This study takes advantage of the similarity within pairs of identical twins to separate family‐specific heterogeneity from true state dependence, where the experience of poverty leads to a higher risk of future poverty. The results, based on a four‐variate probit model, show the importance of true state dependence in poverty. When using a poverty measure based on disposable income, family‐specific heterogeneity explains between 21 and 25 percent of poverty persistence in the Swedish sample of twins.     

Adjusting for family size in the supplemental poverty measure

We point out an anomaly in the adjustment for family size in the US Supplemental Poverty Measure (SPM). The equivalence scale for the SPM implies an instance of increasing marginal costs for an additional adult. A similar criticism of the official US poverty measure was one of several concerns that led to the creation of the SPM. We propose two possible solutions for the problem and show that eliminating the anomaly from the SPM has the greatest effect on the poverty rate for the elderly, as that group is more concentrated near the poverty line.     

中国农村人口贫困变动研究——基于多维脱贫指数测度

本文通过多维贫困识别方法构建相应指数，提出了在返贫和脱贫不同方向上对多维贫困的变动进行分解的思路。同时，用2010—2014年中国家庭追踪调查数据对中国农村人口多维贫困的变动进行了分解，得出以下结论：第一，收入依然是农村人口多维贫困的主要维度，但在改善收入贫困的同时应该防范健康维度返贫的风险。第二，农村人口的多维贫困状况在不断改善，但是由于返贫的影响，脱贫的效果受到了较大削弱，因此在注重脱贫的同时，不应忽视返贫的风险。第三，持续贫困人口贫困状况虽然后来有所改善，但是2012年的恶化状况提示我们对于暂时未能脱贫的人口，还需要采取措施缓解其贫困状况。     

MEASURING POVERTY USING BOTH INCOME AND WEALTH: A CROSS‐COUNTRY COMPARISON BETWEEN THE U.S. AND SPAIN

We study the correspondence between a household's income and its vulnerability to income shocks in two developed countries: the U.S. and Spain. Vulnerability is measured by the availability of wealth to smooth consumption in a multidimensional approach to poverty, which allows us to identify three groups of households: the twice‐poor group, which includes income‐poor households who lack an adequate stock of wealth; the group of protected‐poor households, which are all those income‐poor families with a buffer stock of wealth they can rely on; and the vulnerable‐non‐poor group, including households above the income‐poverty line that do not hold any stock of wealth. Interestingly, the risk of belonging to these groups changes over the life‐cycle in both countries while the size of the groups differs significantly between Spain and the U.S., although this result is quite sensitive to whether the housing wealth component is included in the wealth measure or not.     

Decomposing the changes in poverty: Poverty line and distributional effects

When measuring poverty in developed countries, the poverty line used to identify the poor is usually relative and set as a percentage of the median (or of the mean) of the total income. In consequence, when poverty is analyzed over a period of time, changes in the poverty level depend on the impact of evolving standards. To eliminate this effect, sometimes, an anchored poverty line is used. Furthermore, changes in the mean of the distribution and in the inequality among the poor may also affect the poverty levels. This note proposes a decomposition of the changes in poverty as the sum of four terms. The first two reflect the impact in poverty of changes in living standards and the other two measure the effect of the distributional growth and redistribution. This decomposition will help policymakers in the implementation of a more specific antipoverty agenda. An application with data from the European Union Survey on Income and Living Conditions shows the potential of the decomposition proposed.     

“When Life Gives You Lemons”: Using Cross-Sectional Surveys to Identify Chronic Poverty in the Absence of Panel Data

At the core of poverty eradication is the need to eliminate that poverty that is persistent over time (chronic poverty). Unfortunately, traditional approaches to identifying chronic poverty require longitudinal data that is rarely available. In its absence, this paper proposes an alternative approach that only requires 1 year of cross-sectional data on monetary and non-monetary poverty. It puts forth two conjectures and contends that the combined profile of a household as both income poor and multidimensionally poor can be used as a proxy of that household being chronically income poor. To explore the viability of this approach, we use a probit model and longitudinal data for three Latin American countries to estimate households’ probabilities of remaining in income poverty based on their past income and multidimensional poverty statuses. We find empirical support for the approach that is significant, consistent across countries, and robust to various controls and periods of analysis.     

Income distribution and economic development: Insights from machine learning

We draw upon recent advances that combine causal inferences with machine learning, to show that poverty is the key income distribution measure that matters for development outcomes. In a predictive framework, we first show that LASSO chooses only the headcount measure of poverty from 37 income distribution measures in predicting schooling, institutional quality, and per capita income. Next, causal inferences with post‐LASSO models indicate that poverty matters more strongly for development outcomes than does the Gini coefficient. Finally, instrumental variable estimates in conjunction with post‐LASSO models show that compared to Gini, poverty is more strongly causally associated with schooling and per capita income, but not institutional quality. Our results question the literature's overwhelming focus on the Gini coefficient. At the least, our results imply that the causal link from inequality (as measured by Gini) to development outcomes is tenuous.     

利用线性支出系统ELES测定贫困线的实证分析--兼比较几种贫困标准

本文认为,现阶段线性支出系统ELES可以用来衡量相对贫困程度。该方法不仅适合制定全国贫困标准,也适合制定各地区贫困标准。ELES借助一般抽样调查的统计分组数据即可得到具体分析结果,具有较强的实用性。相关部门可以通过抽样调查得出居民的基本消费需求,在此基础上对ELES分析法得出的基本消费需求额进行修正,从而确定符合实际情况的贫困线。现行的各种国际贫困线标准较高,因而不符合中国实际情况。     

Small business and entrepreneurship in the knowledge economy: A comparison of Australia and Sweden

Dominant explanations within the existing development literature for the differences in poverty levels around the world have tended to ignore the influence of international inequality on poverty, instead focusing solely on domestic factors. In this paper, I conduct a regression analysis of the effect of inequality between countries on world poverty between 1980 and 2007, employing a new structural measure of international inequality which is created using social network analysis to calculate countries' positions in international trade networks. Countries' infant mortality rates are used to measure poverty. The results of the empirical analysis provide cross-country evidence to demonstrate that structural inequalities in the international system have a significant impact on poverty around the world. As such, the analysis demonstrates the need to move beyond focusing exclusively on domestic attributes of developing countries towards considering the broader international political economy in analysing contemporary poverty.     

Estimating Lower Tail Dependence Between Pairs of Poverty Dimensions in Europe

This article provides an innovative method for measuring the dependence between pairs of poverty dimensions using a semiparametric copula approach that permits us to account for the importance of extreme low values. The association between pairs of poverty dimensions at the lower tail is easily measured using the parameter estimates of the specified parametric copula, and no further calculations are needed. This approach is used to measure the bivariate lower tail dependence between the dimensions of the AROPE rate in Europe at two time points (2009 and 2018). The findings reveal a statistically significant increase in the lower tail dependence between 2009 and 2018 in several European countries.     

A Multidimensional Poverty Index for Latin America

This paper proposes a new Multidimensional Poverty Index for Latin America. The index combines monetary and non‐monetary indicators, updates deprivation cut‐offs for certain traditional unsatisfied basic needs indicators and includes some new indicators, aiming to maximize regional comparability within the data constraints. The index is estimated for 17 countries of the region at two points in time—one around 2005 and the other around 2012. Overall, we estimate about 28 percent of people are multidimensionally poor in 2012 in the region. We find statistically significant reductions of poverty in most countries, both in terms of incidence and intensity over the period under analysis. However, important disparities between rural and urban areas remain. Statistical scrutiny of the index suggests that it captures the state of poverty relatively well while maintaining a certain parsimony and being highly robust to changes in weights, indicators, and poverty cut‐off.     

Decomposing the contribution of migration to poverty reduction: methodology and application to Tanzania

In an economy with migration, poverty changes are composed of a number of forces, including the income gains and losses realized by the various migration streams. We present a simple but powerful decomposition methodology that uses panel data to measure the contributions of different migration streams to overall poverty change. An application to Tanzania shows the new insights that are provided – in particular on the role of migration to secondary towns in poverty reduction.     

Linkages between poverty and income inequality of urban–rural sector: a time series analysis of India’s urban-based aspirations from 1951 to 1994

This study examines the impact of urban and rural development on poverty and inequality in India before economic reform. The methodology comprises two dimensions. Modern time series methods are used to uncover the dynamic patterns of urban–rural poverty and income inequality. A machine-learning algorithm is used to determine the causal structure among the development indicators. Our results show that reductions in rural poverty appear to be a more effective in reducing both urban and rural poverty, although the costs of achieving these reductions have not been considered.