Deprivation and the Dimensionality of Welfare: A Variable‐Selection Cluster‐Analysis Approach

21 Pages Posted: 19 Jan 2016

See all articles by Germán Caruso

Germán Caruso

World Bank; University of Illinois at Urbana-Champaign - Department of Economics

Walter Sosa-Escudero

Universidad Nacional de La Plata - Faculty of Economics

Marcela Svarc

University of San Andres (UMSA)

Date Written: December 2015

Abstract

We approach the problems of measuring the dimensionality of welfare and that of identifying the multidimensionally poor, by first finding the poor using the original space of attributes, and then reducing the welfare space. The starting point is the notion that the “poor” constitutes a group of individuals that are essentially different from the “non‐poor” in a truly multidimensional framework. Once this group has been identified through a clustering procedure, we propose reducing the dimension of the original welfare space using recent blinding methods for variable selection. We implement our approach to the case of Latin America based on the Gallup World Poll, which contains ample information on many dimensions of welfare.

Keywords: clusters, factor analysis, multidimensional welfare, poverty

JEL Classification: C49, D31, I32

Suggested Citation

Caruso, German and Sosa-Escudero, Walter and Svarc, Marcela, Deprivation and the Dimensionality of Welfare: A Variable‐Selection Cluster‐Analysis Approach (December 2015). Review of Income and Wealth, Vol. 61, Issue 4, pp. 702-722, 2015, Available at SSRN: https://ssrn.com/abstract=2717184 or http://dx.doi.org/10.1111/roiw.12127

German Caruso (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

University of Illinois at Urbana-Champaign - Department of Economics ( email )

410 David Kinley Hall
1407 W. Gregory
Urbana, IL 61801
United States

Walter Sosa-Escudero

Universidad Nacional de La Plata - Faculty of Economics ( email )

1900 La Plata
Argentina
(541) 553-9983 (Phone)

Marcela Svarc

University of San Andres (UMSA)

Vita Dumas 284
(1644) Victoria, Pcia
Buenos Aires, Buenos Aires 1644
Argentina

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