|Dr. Andrea Franco-Correa
On the Measurement of Multidimensional Poverty as a Policy Tool: Empirical Applications to Chile, Colombia, Ecuador and Peru
Robin Cowan, Fred Gault and Gaston Yalonetzky
The measurement of poverty has been under constant scrutiny from academics and policy-makers. For many years, income (or consumption/expenditures) has been used as a proxy to understand and measure poverty. Nonetheless, over the last decades, increasingly theoretical and methodological discussions have shifted the attention to what is now called Multidimensional Poverty. Since 2010, the Human Development Report (HDR), the publication containing the Human Development Index, has included a ranking of more than 100 developing countries, in the form of an index, referred to as the Multidimensional Poverty (MPI). The publication of the HDR not only sparked a debate about the interpretation of such rankings and comparisons of poverty between countries but also about the measurement of poverty in general. The ranking published in the HDR is constructed on the basis of the most widely used counting index of multidimensional poverty, the Adjusted Headcount Ratio ( in this thesis AHR) of the Alkire-Foster (AF) family of indices. Despite several criticisms, the AHR has become widely applied, not only in the academic world but also as a tool for advocacy, targeting, monitoring and evaluating social policies and programs.
In a world where composite indices are being increasingly used as policy tools, rankings are used as tools for governance and synthetic indices are perceived as data simplification of complex phenomena. Although easy to communicate, the simplicity attributed to them is misleading. The best way to measure different phenomena is a matter of disagreement, but if composite indexes on the measuring of well-being are here to stay, the best solution is to understand and transparently perform the tests that will certify that at least all the possible scenarios are being considered, and that choices are made with a full understanding of the consequences of normative decisions. Regardless of the method, the measurement of poverty will be full of normative decisions about what constitutes poverty, by whom and under which circumstances it is considered poverty. The topic of this dissertation consists in understanding the effect of those normative decisions, with empirical applications to the particular contexts of Chile, Colombia, Ecuador and Peru.