OPHI Working Paper

This study has been prepared within the OPHI theme on multidimensional .... We will use the word 'stringent' to refer to a subset of the multidimensionally poor ...
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Oxford Poverty & Human Development Initiative (OPHI) Oxford Department of International Development Queen Elizabeth House (QEH), University of Oxford

OPHI WORKING PAPER NO. 99 Identifying Destitution through Linked Subsets of Multidimensionally Poor: An Ordinal Approach Sabina Alkire* and Suman Seth** January 2016 Abstract A reduction in overall poverty may not necessarily improve the situations of the poorest. In order to pay particular attention to the poorest, it is crucial to distinguish them from the moderately poor population. In income poverty measurement, this distinction is made by defining a more stringent poverty cutoff. In this paper, we explore such mechanisms to distinguish subsets of the poor in a multidimensional counting framework, under the practical assumption that many variables for assessing deprivations are ordinal. We examine two approaches that capture two distinct forms of stringent multidimensional poverty: one uses a more stringent vector of deprivation cutoffs, and the other, a more stringent crossdimensional poverty cutoff. To explore the distinction between these two approaches empirically, we examine the evolution of multidimensional poverty in Nepal. Our findings show crucial differences between these two approaches. Keywords: Destitution, Extreme Poverty, Ultra-Poverty, Multidimensional Poverty, Poverty Characteristics, Poverty Profile, Nepal. JEL classification: I3, I32, D63, O1

* Oliver T. Carr Jr. Professor in International Affairs, Elliott School of International Affairs, George Washington University, 1957 E Street, NW, Washington, DC 20052, USA, and Oxford Poverty & Human Development Initiative (OPHI), Department of International Development, University of Oxford, UK, [email protected] ** Lecturer, Economics Division, Leeds University Business School, Maurice Keyworth Building, Leeds, LS2 9JT, UK, and Research Associate, Oxford Poverty & Human Development Initiative (OPHI), University of Oxford, UK, [email protected] This study has been prepared within the OPHI theme on multidimensional measurement. OPHI gratefully acknowledges support from the German Federal Ministry for Economic Cooperation and Development (BMZ), the Economic and Social Research Council, national offices of the United Nations Development Programme (UNDP), national governments, the International Food Policy Research Institute (IFPRI), the European Union, and private benefactors. For their past support OPHI acknowledges the UK Economic and Social Research Council (ESRC)/(DFID) Joint Scheme, the Robertson Foundation, the John Fell Oxford University Press (OUP) Research Fund, the Human Development Report Office (HDRO/UNDP), the International Development Research Council (IDRC) of Canada, the Canadian International Development Agency (CIDA), the UK Department of International Development (DFID), the United Nations International Children’s Emergency Fund (UNICEF), Praus and AusAID. ISSN 2040-8188

ISBN 978-19-0719-486-3

Alkire and Seth

Identifying Destitution

Acknowledgements This article has benefitted from the comments of the participants at the Queen Elizabeth House brown bag seminar, the Oxford Poverty and Human Development lunch time seminar series and the Centre for Studies on African Economies (CSAE) conference 2015 at the University of Oxford, the conference on ‘Inequality – Measurement, Trends, Impacts, and Policies’ at United Nations University, World Institute for Development Economics Research (WIDER) at Helsinki, and the 6th meeting of the Society for the Study of Economic Inequality (ECINEQ) in Luxembourg. We thank Ana Vaz for sharing the harmonized datasets on Nepal for our study. The usual disclaimer applies. Citation: Alkire, S. and Seth, S. (2016). “Identifying destitution through linked subsets of multidimensionally poor: An ordinal approach.” OPHI Working Paper 99, University of Oxford.

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