| Title: |
A Quick-Fix for Perverse Incentives Inherent in Mainstream Multidimensional Poverty Measures |
| Authors: |
Decerf, Benoit |
| Publisher Information: |
World Bank |
| Publication Year: |
2025 |
| Collection: |
The World Bank: Open Knowledge Repository (OKR) |
| Subject Terms: |
MULTIDIMENSIONAL POVERTY; GLOBAL MPI; ADJUSTED HEAD-COUNT RATIO; DIMENSIONAL BREAKDOWN |
| Description: |
Most multidimensional poverty measures used in practice, including the global Multidimensional Poverty Index, are based on the adjusted headcount ratio. However, this poverty index provides perverse incentives. Policies that minimize this index prioritize targeting the least intensely poor individuals, rather than the most intensely poor individuals. This paper proposes a quick fix solution that tweaks the adjusted headcount ratio without affecting the identification of the poor. The resulting index satisfies the same properties as the adjusted headcount ratio, except for Dimensional Breakdown. The paper argues that this is not a sufficient reason to discard this index, by providing two examples illustrating key limitations of the decomposition across dimensions permitted by Dimensional Breakdown. This decomposition does not provide the necessary information to find optimal policies. More importantly, this decomposition may mislead policy makers on the underlying sources of progress. |
| Document Type: |
report |
| File Description: |
application/pdf; text/plain |
| Language: |
English |
| ISBN: |
978-0-9940740-5-8; 0-9940740-5-0 |
| Relation: |
Policy Research Working Paper; 11113; http://documents.worldbank.org/curated/en/099407405052528815; https://hdl.handle.net/10986/43155 |
| DOI: |
10.1596/1813-9450-11113 |
| Availability: |
https://hdl.handle.net/10986/43155; http://documents.worldbank.org/curated/en/099407405052528815; https://doi.org/10.1596/1813-9450-11113 |
| Rights: |
CC BY 3.0 IGO ; https://creativecommons.org/licenses/by/3.0/igo/ ; World Bank |
| Accession Number: |
edsbas.786FA45C |
| Database: |
BASE |