Coherent Multidimensional Poverty Measurement

This paper presents a family of multidimensional poverty indexes that measure poverty as a function of the extent and the intensity of poverty. We provide a unique axiomatics from which both extent and intensity of poverty can be derived, as well as the poor be endogenously identified. This axiomatics gives rise to a family of multidimensional indexes whose extremal points are the geometric mean and the Maximin solution. We show that, in addition to all the standard features studied in the literature, these indexes are continuous (a must for cardinal poverty measures) and ordinal, in the sense that they do not depend upon the units in which dimensions of achievements (or deprivations) are computed. Moreover, they verify the decreasing marginal rate of substitution property: the higher one’s deprivation in one dimension, the smaller the increase of achievement in that dimension that sufices to compensate for a decrease of achievement in another dimension.

Rakesh Gupta was associated with the Energy and Prosperity Chair for the duration of his thesis.