Did Poverty Reduction Reach the Poorest of the Poor? Assessment Methods in the Counting Approach

A number of multidimensional poverty measures have recently been proposed, within counting approach framework, respecting the ordinal nature of dimensions. Besides ensuring a reduction in poverty, however, it is important to monitor distributional changes to ensure that poverty reduction has been inclusive in reaching the poorest. Distributional issues are typically captured by adjusting a poverty measure to be sensitive to inequality among the poor. This approach however has certain practical limitations. It conflicts, for example, with some policy-relevant measurement features, such as the ability to decompose a measure into dimensions post-identification, and does not create an appropriate framework for assessing disparity in poverty across population subgroups. In this paper, we propose and justify the use of a separate decomposable inequality measure – a positive multiple of ‘variance’ – to capture the distribution of deprivations among the poor and to assess disparity in poverty across population subgroups. We demonstrate the applicability of our approach through two contrasting inter-temporal illustrations using Demographic Health Survey (DHS) datasets for Haiti and India.

Citation: Seth, S. and Alkire, S. (2014). 'Did poverty reduction reach the poorest of the poor? Assessment methods in the counting approach', OPHI Working Papers 77, Oxford Poverty and Human Development Initiative (OPHI), University of Oxford.

Updated version is published in Research in Economic Inequality: Poverty, Inequality and Welfare (ed. J. Bishop), 2017, Vol. 25, pp. 63–102, ISBN: 978-1-78714-522-1.