Transitions in poverty and its deprivations
This paper explores a novel way to analyse poverty dynamics that is specific to certain measures of multidimensional poverty, such as the “adjusted headcount ratio” of the Alkire–Foster class of measures. Assuming there is panel data available, I show that a simultaneous and comprehensive account of transitions in deprivations and poverty allows complex interdependencies between dimensions in a dynamic context to be handled and, at the same time, allows for several advanced types of analyses. These analyses include (i) a decomposition of changes in multidimensional poverty, which reveals why poverty decreases or increases; (ii) a framework to examine and understand the relationship between the dashboard approach and dimensional contributions and multidimensional poverty in a dynamic setting; (iii) a presentation of methods that illuminate the process of the accumulation of deprivations. The suggested types of analyses are illustrated using German panel data. Implications for monitoring and policy evaluation are discussed.
The author is thankful for helpful comments and suggestions provided by Sabina Alkire, Gordon Anderson, Paola Ballon, Javier Bronfman, Stephan Klasen, Natalie Quinn, Suman Seth, Gaston Yalonetzky, two anonymous referees and the participants of an OPHI seminar in Oxford 2015, the HDCA conference in Washington D.C. in 2015, the IARIW conference in Dresden 2016, the WEAI conference in Santiago de Chile 2017, and the Catalan Economic Society Conference in Barcelona 2017. The author also gratefully acknowledges funding from the German Research Foundation (DFG) (RI 441/6-1).
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