Differentiating between Dimensionality and Duration in Multidimensional Measures of Poverty: Methodology with an Application to China

27 Pages Posted: 12 Feb 2019

See all articles by Aaron Nicholas

Aaron Nicholas

Deakin University

Ranjan Ray

Monash University - Department of Economics

Date Written: March 2019

Abstract

We develop a multidimensional poverty measure that is sensitive to the within‐individual distribution of deprivations across dimensions and time. Our measure combines features from a static multidimensional measure (Alkire and Foster, [Alkire, S., 2011a]) and a time‐dependent unidimensional measure (Foster, [Foster, J., 2009]). The proposed measure separately identifies—and can therefore be decomposed according to—the proportion of the poverty score attributable to: (i) the concentration of deprivations within periods; (ii) the concentration of deprivations within dimensions. In doing so it allows for a poverty ranking that is robust to assumptions about the trade‐off between the two components. Previous measures have not allowed for the features proposed here due to the inability to calculate the exact contribution of each dimension to overall poverty. We overcome this by adapting to our measure the Shapley decomposition proposed in Shorrocks ([Shorrocks, A. F., 2013]) (based on Shapley, [Shapley, L., 1953]). The measure is applied to data from China, 2000‐2011.

Keywords: multidimensional poverty, poverty in China, poverty duration, subgroup decomposability, Shapley decomposition

JEL Classification: I31, I32

Suggested Citation

Nicholas, Aaron and Ray, Ranjan, Differentiating between Dimensionality and Duration in Multidimensional Measures of Poverty: Methodology with an Application to China (March 2019). Review of Income and Wealth, Vol. 65, Issue 1, pp. 48-74, 2019. Available at SSRN: https://ssrn.com/abstract=3332588 or http://dx.doi.org/10.1111/roiw.12313

Aaron Nicholas (Contact Author)

Deakin University ( email )

75 Elgar Rd
Burwood, Victoria 3125
Australia

Ranjan Ray

Monash University - Department of Economics ( email )

Wellington Road
Clayton, Victoria 3
Australia

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