Who really are the poor? Measuring poverty with multiple dimensions

Crawford School of Public Policy | Arndt-Corden Department of Economics | Indonesia Project

Event details

Indonesia Study Group

Date & time

Wednesday 30 May 2018


McDonald Room, Menzies Library entry level, RG Menzies Building 2, ANU


Putu Geniki Lavinia Natih, PhD Candidate at Oxford University.


ANU Indonesia Project

The trend in poverty is a litmus test of the social quality of economic systems; a poverty measure provides a basis to evaluate the effectiveness of welfare policies and acts as a powerful instrument to focus policy makers’ attention on the living conditions of the poor. Discontent with uni-dimensional measures of poverty reflects widespread agreement that poverty is a multifaceted phenomenon, encompassing deprivations along multiple dimensions.

In developing these multidimensional measures, however, there exists substantial debate on how to conceptualize and select the multiple facets of poverty to be included within measurement. Talking of existing multidimensional measures, Ravallion (2012) points toward the arbitrariness in the selection of measure components; Nolan and Whelan (2011) argue that current applications of multidimensional poverty measurement are more often than not ‘rather ad hoc’.

This paper addresses these challenges. It first establishes that poverty is indeed multidimensional and then presents arguments as to which dimensions and indicators should be included within a multidimensional measure and how they should be weighed against each other. Natih will illustrate the application of my proposed method using a Delphi case study of Bogor City, West Java. Compared to existing methods of gathering opinions on multidimensional-poverty-measure components, such as the Focus Group Discussion, anonymity within the Delphi method offers the advantage of preventing professional status and high position from forcing judgments in certain directions.

Results from the exercise confirm that poverty is indeed a multidimensional phenomenon and that the condition of poverty is best described using a ‘dashboard’ measure, which encompasses five dimensions: (1) education, (2) health and safety, (3) asset ownership and employment, (4) environment and adequate living arrangements, and (5) family planning.

Natih will discuss the importance of weights assigned to these dimensions. Significant differences were found when comparing components stated as important within the Bogor City Delphi results, with components of existing uni and multidimensional measures. These differences may lead to contrasts in how measures identify both the size and composition of the poor. Natih will conclude that the sole use of existing uni- or multidimensional measures without additional consideration of context-specific measures, may lead to potential mismatch and misidentification of the poor; thus hindering the effectiveness of poverty alleviation and targeting policies.

Putu Geniki Lavinia Natih graduated from the Faculty of Economics, University of Indonesia. She has an MPhil in Development Studies from Oxford University and is now in the final stages of her PhD, also at Oxford University.

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