Dynamic Consistency of Multidimensional and Income Targeting: An Application for Mexico Using Panel Data Information

Abstract

This paper compares the dynamic consistency of targeting methodologies that use multidimensional welfare indicators with those based on means and proxy means tests using panel data from Mexico. To make these comparisons, an extension of the Alkire and Foster (2008) dual cutoff multidimensional poverty methodology is proposed. This extension provides a relative approach to multidimensional deprivation that ranks individuals according to an aggregate of their relative position in the distribution of a set of welfare attributes or outcomes.