Abstract
Counting poverty measures have gained prominence in the analysis of multidimensional poverty in recent decades. Poverty orderings based on these measures typically depend on methodological choices regarding individual poverty functions, poverty cut-offs, and dimensional weights whose impact on poverty rankings is often not well understood. In this paper we propose new dominance conditions that allow the analyst to evaluate the robustness of poverty comparisons to those choices. These conditions provide an approach to evaluating the sensitivity of poverty orderings superior to the common approach of considering a restricted and arbitrary set of indices, cut-offs, and weights. The new criteria apply to a broad class of counting poverty measures widely used in empirical analysis of poverty in developed and developing countries including the multidimensional headcount and the adjusted headcount ratios. We illustrate these methods with an application to time-trends in poverty in Australia and cross-regional poverty in Peru. Our results highlight the potentially large sensitivity of poverty orderings based on counting measures and the importance of evaluating the robustness of results when performing poverty comparisons across time and regions.
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Acknowledgements
The authors would like to thank two anonymous referees, Claudio Zoli, Olga Canto, Sabina Alkire, Suman Seth, Indranil Dutta, Florent Bresson, Cesar Calvo, Tomas Zelinsky and participants at the 6th ECINEQ Meeting, Luxembourg, July, 2015; the 1st Conference of the Peruvian Economic Association, Lima, Peru, August 2014; and the 33rd IARIW General Conference, Rotterdam, Netherlands, August 2014, for their helpful comments. An earlier version of this paper was published as a working paper in the ECINEQ working paper series (ECINEQ WP 2015/361). The usual disclaimer applies. This research was supported by the Australian Research Council Centre of Excellence for Children and Families over the Life Course (project number CE140100027). The Centre is administered by the Institute for Social Science Research at The University of Queensland, with nodes at The University of Western Australia, The University of Melbourne and The University of Sydney. The views expressed herein are those of the authors and are not necessarily those of the Australian Research Council. Francisco also acknowledges financial support from the Spanish State Research Agency and the European Regional Development Fund (ECO2016-76506-C4-2-R).
This paper uses unit record data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey. The HILDA Project was initiated and is funded by the Australian Government Department of Social Services (DSS) and is managed by the Melbourne Institute of Applied Economic and Social Research (Melbourne Institute). The findings and views reported in this paper, however, are those of the authors and should not be attributed to either DSS or the Melbourne Institute.
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Azpitarte, F., Gallegos, J. & Yalonetzky, G. On the robustness of multidimensional counting poverty orderings. J Econ Inequal 18, 339–364 (2020). https://doi.org/10.1007/s10888-019-09435-5
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DOI: https://doi.org/10.1007/s10888-019-09435-5