Understandings and Misunderstandings of Multidimensional Poverty Measurement

Abstract

Multidimensional measures provide an alternative lens through which poverty may be viewed and understood. In recent work we have attempted to offer a practical approach to identifying the poor and measuring aggregate poverty (Alkire and Foster 2011). As this is quite a departure from traditional unidimensional and multidimensional poverty measurement – particularly with respect to the identification step – further elaboration may be warranted. In this paper we elucidate the strengths, limitations, and misunderstandings of multidimensional poverty measurement in order to clarify the debate and catalyse further research. We begin with general definitions of unidimensional and multidimensional methodologies for measuring poverty. We provide an intuitive description of our measurement approach, including a ‘dual cutoff’ identification step that views poverty as the state of being multiply deprived, and an aggregation step based on the traditional Foster Greer and Thorbecke (FGT) measures. We briefly discuss five characteristics of our methodology that are easily overlooked or mistaken and conclude with some brief remarks on the way forward.

Keywords: poverty measurement, multidimensional poverty, deprivation, FGT measures

JEL Classification: I3, I32, D63, O1