Unidimensional and multidimensional fuzzy poverty measures: New approach

the analysis of deprivation is usually seen as a unidimensional condition. However, recently it is considered to be a multidimensional one. A useful tool for such analysis is to view deprivation as a degree providing a quantitative expression to its intensity for individuals. Such fuzzy conceptualisation has been widely adopted in poverty and deprivation research. This paper aims to further develop and refine this strand of research. First, we re-examine two aspects introduced by the use of fuzzy measures, as opposed to conventional poor/non-poor dichotomous measures, namely the choice of membership functions and the rules to manipulate, resulting fuzzy sets. Secondly, we propose fuzzy monetary and non-monetary measures with the membership functions of poor and non-poor. An application based on individual well-being data from Tunisian households in 1990 is presented to illustrate use of one of the proposed concept.     

The probability of multidimensional poverty: A new approach and an empirical application to EU-SILC data

This paper proposes a novel method to analyze multidimensional poverty by using a large set of feasible weights to summarize the information about the poor, which enables remaining agnostic about the relative importance given to different poverty dimensions. This method allows for the calculation of the individual probability of being poor in a multidimensional perspective. The distribution of individual probabilities can then be combined with Generalized Lorenz dominance techniques to derive unanimous consent for a wide class of social welfare functions with a minimum load of value judgments. The innovations proposed here allow to move from a dual definition of poverty, where poor and non-poor individuals are classified in a mutually exclusive context, to a continuous measure of deprivation capturing both the extensive and intensive margin of multidimensional poverty. The empirical application of the method consists of measuring multidimensional poverty in ten selected countries using four waves of EU-SILC data (2008–2014).     

Fuzzy Targeting Indices and Orderings

The targeting efficiency and the coverage of social programs for the poor are typically analyzed by partitioning the total population in four mutually exclusive groups: the poor who benefit from a program or policy, the poor who do not benefit, the non‐poor who benefit, and the non‐poor who do not benefit. While useful, this partition into crisp sets may not capture the difficulty of identifying the poor. This paper presents a method that consists of using a membership function to identify to what extent households can be considered as poor or non‐poor. The method builds on fuzzy sets theory whereby the definition of the boundaries of a set, say the poor or the non‐poor, is fuzzy. We characterize the properties that membership functions should have, and we test for the robustness of targeting performance comparisons to the choice of the membership function.     

FINDING THE POOR

As a basis for judging how public policy affects the poor, this article explores how "poor" families may be defined and how well such families can be distinguished from other families in the less developed countries. This is done by seeking proxies for poverty which are relatively easy to measure, accurate in discriminating between the poor and the non-poor, and relevant to public policy. To this end, a highly parsimonious model is developed, based on truncation and regression procedures, using only family size and number of wage earners in addition to either income or an education-age combination. Application of this model to data from household surveys in three major cities of Latin America shows that the model is highly effective in pinpointing poverty households, although the pattern of errors is not random, the most frequent type of error being to classify poverty households as non-poor.
Especially significant is that the model is nearly as effective for discriminating poverty households from others when financial variables are excluded as when they are included. This would suggest that a good deal of flexibility exists in deciding what variables to include in future studies of this type. The results also suggest that even better results should be possible if more complete information is obtained on the employment status of the different members of the household and on the contribution of each to household income. Ideally, the data collection and model development should proceed in an iterative manner since there are numerous possible variables as well as alternative model formulations.     

Poverty among ethnic minorities: the transition process,inequality and economic growth

This article investigates the process of reducing poverty in ethnic minority households. Using two recent Vietnam household surveys, we find that ethnic minority households are more likely to be persistently poor and less likely to be persistently non-poor than ethnic majority households. The within-group component generated by the variation in income within each ethnicity group explains more than 90% of the change in total inequality. Income redistribution plays an important role in decreasing the poverty gap and decreasing poverty severity. Different ethnic groups have different poverty patterns, which should be noted when designing policies to alleviate poverty and inequality.     

Out-of-pocket health care expenditure in Turkey: Analysis of the 2003–2008 Household Budget Surveys

This paper analyses the prevalence of ‘catastrophic’ out-of-pocket health expenditure in Turkey and identifies the factors which are associated with its risk using the Turkish Household Budget Surveys from 2003 to 2008. A sample selection approach based on Sartori (2003) is adopted to allow for the potential selection problem which may arise if poor households choose not to seek health care due to concerns regarding its affordability. The results suggest that poor households are less likely to seek health care as compared to non-poor households and that a negative relationship between poverty and experiencing catastrophic health expenditure remains even after allowing for such selection bias. Our findings, which may assist policy-makers concerned with health care system reforms, also highlight factors such as insurance coverage, which may protect households from the risk of incurring catastrophic health expenditure.     

Decomposing inequality change from the perspective of reranking and income growth between income groups

This paper proposes a decomposition of the change in inequality from the perspective of income groups. For every dichotomisation of the income distribution into poorer and richer parts, the decomposition allows to detect the change in the relative income gap between the two parts and the reranking between poorer and richer individuals. This decomposition approach is particularly suitable when analysts split the population between the individuals initially below the poverty line and those above the poverty line, since the decomposition allows to capture the effects of reranking and disproportional growth in income between poor and non-poor individuals and to compare these effects with those detected for the entire population. An application to Italian income data illustrates the proposed decomposition.     

"送猪崽"与"折现金":我国产业精准扶贫的路径分析与政策模拟研究

产业扶贫旨在将贫困户的生产活动纳入社会产业大循环,因此其一直是全世界扶贫工作的重要方式和主要目标之一.我国产业精准扶贫出现了两条新路径:一是GTP路径,即向贫困户送猪崽、鸡苗和良种等资本,直接将贫困户的生产纳入当地的产业体系;二是GSP路径,即将扶贫资金折合现金并由贫困户自己决定投资项目和选择产业.文章构建了包括贫困户和非贫困户的微观主体行为模型以及基于农村公平和效率的农村福利模型,分别研究了这两条新路径上贫困户福利和农村福利的动态演变过程,然后使用系统动力学模型进行了政策模拟,拟探索出我国产业精准扶贫的最优路径及其政策支持空间.结果显示:在第3~4年的时间内,GSP路径要优于GTP,但是超过4年,GTP路径上的贫困户福利和农村福利就会累进性超过GSP.而且,在GTP路径上的时间越长,扶贫效果就越好.在中长期,提高贫困户的技术水平,增加贫困户的初始资本额是进一步提高GTP路径上贫困户福利和农村福利水平的重要环节.文章的结论对于提高我国精准扶贫的理论自信,进一步完善我国产业精准扶贫政策体系具有一定的启示.     

MEASURING MULTIDIMENSIONAL POVERTY: AN EMPIRICAL COMPARISON OF VARIOUS APPROACHES

This paper makes a systematic comparison of four approaches to multidimensional poverty analysis based respectively on the theory of fuzzy sets, information theory, efficiency analysis and axiomatic derivations of poverty indices. The database was the 1995 Israeli Census that provided information on the ownership of various durable goods. There appears to be a fair degree of agreement between the various multidimensional poverty indices concerning the identification of the poor households. The four approaches have also shown that poverty decreases with the schooling level of the head of the household, first decreases and then increases with his/her age and with the size of the household. Poverty is higher when the head of the household is single and lower when he/she is married, lowest when the head of the household is Jewish and highest when he/she is Muslim. Poverty is also higher among households whose head immigrated in recent years, does not work or lives in Jerusalem. These observations were made on the basis of logit regressions. This impact on poverty of many of the variables is not very different from the one that is observed when poverty measurement is based only on the income or the total expenditures of the households.     

SEQUENTIAL STOCHASTIC DOMINANCE AND THE ROBUSTNESS OF POVERTY ORDERINGS

When comparing poverty across distributions, an analyst must select a poverty line to identify the poor, an equivalence scale to compare individuals from households of different compositions and sizes, and a poverty index to aggregate individual deprivation into an index of total poverty. A different choice of poverty line, poverty index or equivalence scale can of course reverse an initial poverty ordering. This paper develops easily-checked sequential stochastic dominance conditions that throw light on the robustness of poverty comparisons to these important measurement issues. These general conditions extend well-known results to any order of dominance, to the choice of individual versus family based aggregation, and to the estimation of "critical sets" of measurement assumptions. Our theoretical results are briefly illustrated using data for four countries drawn from the Luxembourg Income Study databases.     

Fuzzy Chronic Poverty: A Proposed Response to Measurement Error for Intertemporal Poverty Measurement

A number of chronic poverty measures are now empirically applied to quantify the prevalence and intensity of chronic poverty, vis‐à‐vis transient experiences, using panel data. Welfare trajectories over time are assessed in order to identify the chronically poor and distinguish them from the non‐poor, or the transiently poor, and assess the extent and intensity of intertemporal poverty. We examine the implications of measurement error in the welfare outcome for some popular discontinuous chronic poverty measures, and propose corrections to these measures that seeks to minimize the consequences of measurement error. The approach is based on a novel criterion for the identification of chronic poverty that draws on fuzzy set theory. We illustrate the empirical relevance of the approach with a panel dataset from rural Ethiopia and some simulations.     

Adding value through the mechanization of post-harvest cassava processing,and its impact on household poverty in north-eastern Zambia

This article investigates the impact of adopting a mechanized cassava processing system on household poverty levels in Zambia. An Foster, Greer and Thorbecke (FGT) poverty measure was used to compare poverty levels among households using a mechanized cassava processing system against those households using a nonmechanized process. Based on the FGT poverty measure’s specifications, a significantly lower poverty status of 49% was found among households using the mechanized process when compared to the 58% found among households using the nonmechanized process. The significant factors contributing to these differences in poverty levels include whether households are using a mechanized process or not, the number of years’ schooling among household members, the number of years’ farming experience, household income and membership of associations. The study concludes that the mechanization of cassava processing, particularly if done on the right scale, can transform primary production activities, in turn leading to higher incomes and reduced poverty levels in rural villages. Thus, policies should be introduced aimed at encouraging the promotion of mechanized post-harvest cassava processing technologies among rural households, so as to enhance crop productivity and household income levels, as well as reduce poverty among rural households.     

Do Savings and Credit Institutions Reduce Vulnerability? New Evidence From Mexico

This study examines whether membership in a savings and credit society (SACP) reduces vulnerability to poverty, using a representative survey from the National Savings and Financial Services Bank. The sample of households includes those that are and are not members of a SACP during 2004?2007. This evidence indicates that membership improves income; furthermore, membership decreases the variance in annual household per capita income. Both effects reduce the probability that somebody becomes poor. Finally, the results offer support for the proposition that households that join a SACP have better abilities to smooth consumption in the face of adverse shocks, and thus are less susceptible to shocks, than do households that are not members.     

How well do tree plantations comply with the twin targets of the Clean Development Mechanism? — The case of tree plantations in Tanzania

The Clean Development Mechanism (CDM) of the Kyoto Protocol is supposed to provide both carbon mitigation and poverty reduction. This article reports from a model based study of market related carbon leakage and poverty reduction in the wake of a CDM tree-planting project in Tanzania. A tree plantation was incorporated in a computable general equilibrium (CGE) model with income differentiated household segments. The study focused on sensitivity of carbon leakage and income distribution to different project ownerships and carbon premium allocations. It turned out that the project value in terms of carbon premium has clear shortcomings as indicator of induced GDP growth and poverty alleviation. The non-poor rural and urban households benefit considerably more than the poor households. However, rising household income in all domestic project ownership arrangements increases demand for food, raises use of fertilizer and crop yields. A carbon cycle module for agricultural land use was incorporated in the CGE model, showing an increased carbon sequestration in agricultural soil, representing a negative leakage through markets in the range of 60-120% of the certified emissions reductions as registered in the CDM tree plantation project.     

Gender roles,labour market participation and household income position

In empirical research on labour supply behaviour, variables like age, education or the household's financial situation as well as economic and demographic characteristics, social attitudes and gender role schemes are believed to influence the annual working hours. This paper starts from the assumption that these determinants work differently according to the poverty level of the household in which the individual lives. Using data from the German Socio-Economic Panel (GSOEP), the paper empirically tests this hypothesis for women and men living in households with a disposable income above the poverty line and of those living in poor households. The results of multiple regression analysis show traditional gender role patterns in labour supply decisions, but only for persons in households with an income above the poverty line.     

A Consistent Poverty Approach to Assessing the Sensitivity of Income Poverty Measures and Trends

This paper examines the sensitivity of estimates of income poverty rates and trends to variations in the poverty line and to whether or not certain households are included or excluded from the sample used to estimate poverty. The approach draws on the concept of consistent poverty, which has been used to identify those with incomes below the poverty line who also experience deprivation. Our approach involves excluding households with incomes below the poverty line if they report zero or negative income or are self‐employed, have expenditure well in excess of their income, have substantial wealth holdings, or if they do not report having experienced financial stress over the past year. The combined impact of all four exclusions is to reduce the half‐median income poverty rate from 9.9 per cent to 5.4 per cent, but also suggests that poverty increased by more over the decade to 2003–04 than the original estimates indicate.     

Can microcredit reduce vulnerability to poverty? Evidence from rural Vietnam

Extant literature has extensively explored microcredit's impacts, confirming its essential role in poverty alleviation. However, most studies focus on poverty measures that exclusively emphasize current poverty status without adequately addressing the potential of falling into or remaining in poverty. Furthermore, the role of credit services in helping the poor in rural areas appears to be underexamined in the literature. To address this knowledge gap, this study investigates whether rural microcredit can reduce household vulnerability to poverty. A theoretical framework is developed to capture the mechanism by which microcredit borrowing has a vital role in household businesses and impacts the probability of being poor in the future. The Vietnam Access to Resources Household Survey data set from 2008 to 2016 is used to explore this issue. The findings indicate that rural Vietnam's access to microcredit significantly reduces vulnerability to poverty. Moreover, better-off households are seemingly the most effective at using microcredit, whereas the opposite is found among worse-off households. These results are found to be robust using the propensity score matching method.     

中国老年家庭的经济脆弱性与贫困

利用中国健康与营养调查(CHNS)2006和2009年的面板数据测度了老年家庭的经济脆弱性,检验各因素对经济脆弱性和贫困的相对影响力。老年家庭的经济脆弱性高于贫困;户主特征和家庭变量不同程度地影响到了经济脆弱性及贫困,代际间向上流动的私人转移支付对老年家庭的经济脆弱性和贫困没有作用;超过24%的非贫困家庭是经济脆弱性家庭;期望效用的脆弱性(VEU)方法表明,不平等虽然减少了脆弱性,但其影响经济脆弱性的力量最小,不可解释的风险是最重要的因素,异质性风险和协同性风险的力量居中。     

“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.     

Measurement of Changes in Economic Welfare in India: 1970–2001

This paper provides time series estimates of measures of economic welfare, inequality, decile class specific true cost of living index and poverty measures based on 20 rounds of National Sample Survey data for the period 1970–2001. It has estimated piece-wise Linear Expenditure System (LES) for very poor, moderately poor, non-poor low and non-poor high expenditure groups for rural as well as urban areas. Money metric utility for deciles are derived from the money metric utility function and social welfare index is constructed by aggregating metric utility of the deciles. Using social welfare index as well as real per capita consumption, the paper analyses the changes in economic welfare over the three decades. Using conventional measures, the paper analyses the changes in poverty and inequality during 1970–2001. The paper also provides estimates of the welfare effects of commodity prices.