Explaining Multidimensional Poverty: A Household Level Analysis

Abstract

An index of multidimensional poverty is constructed for the Philippines using the Alkire-Foster methodology. Data from the annual poverty indicators survey (APIS) collected in 2011 are used to calculate the index. An examination of household poverty using mixed logit analysis shows that large-sized households have higher poverty risk. A substantial reduction of this risk is observed for households with heads who at a minimum were able to enter high school. The household head’s health status has a negative impact on the household’s risk of being poor. Small but statistically significant effects, less than 2 percentage points in the probability of being in the state of poverty, are observed with respect to the rest of the variables. Poverty likelihood rises with average household age but declines with the head’s age. The likelihood declines with the presence of OFW remittances. The household is less likely to be in poverty with a female head. These are compared with results of estimates using the income poverty definition.

(Original version title: Multidimensional Poverty in the Philippines)

Keywords: Multidimensional poverty, Alkire-Foster methodology, adjusted headcount, censored headcount, Annual Poverty Indicators Survey, Philippines

JEL Classification: I32