In search of a Multidimensional Poverty Index for Latin America

ROCHE, JOSE MANUEL; SANTOS, MARIA EMMA

BARI

Conferencia; V ECINEQ Meeting; 2013

Society for the Study of Economic Inequality

This paper examines the Multidimensional Poverty Index (MPI) jointly developed by OPHI and UNDP for the case of eighteen Latin American and Caribbean (LAC) countries. The MPI is designed to be internationally comparable and to capture acute poverty. MPI estimates indicate relative low levels of acute poverty in the LAC region among other developing regions of the world. Although this is a message of hope, it can puzzle civil society, NGOs and government agencies working on poverty reduction programmes in the LAC countries. Simultaneously many governments in these countries are developing official multidimensional poverty measures. Thus, there seems to be scope and need for a multidimensional poverty index that allows comparability across countries in the region, yet captures a second layer of poverty, beyond the acute one. Based on the tradition and specificities of the countries of the region, we consider alternative adjustments that could be done to the MPI to satisfy the above requirements. In particular we ponder using different indicators, weights, deprivation cut-offs and poverty cut-offs. We do sensitivity analysis of each of these changes to the MPI sequentially and assess their relevance and convenience for a poverty index for the region.