Getting Multidimensional Poverty Measurement Right by nyut545e2

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									    Multidimensional Poverty
  Measurement Methods (MPMM)
 and the Two Official MPMM being
        applied in Mexico.

          Professor Julio Boltvinik
             jbolt@colmex.mx


Second Peter Townsend Memorial Conference
            Bristol, January 2011
       Contents of this presentation
1. Origins of the need for MPMM and
   problems posed by it.
2. Some principles which I have developed in
   my search for a better solution to the
   problems posed by poverty measurement
   especially when it is multidimensional.
3. A typology of poverty measurement
   methods with emphasis on MPMM, the
   truly poor and the two official methods
   prevailing in Mexico.
1. Origins and problems of
    multidimensionality
 Origins and problems of multidimensionality /I
Poverty Measurement must be multidimensional
because: 1. Human needs are Multiple (e.g. Maslow‟s 7
needs or Max-Neef 10 needs), which are met through
diverse satisfiers (goods & services, relations, activities,
theories, capacities, institutions) made possible by a
plurality of resources/well-being sources (WBS) (see
slide on WBS).
2. Markets have limits → exchange value is not
universal (some satisfiers -use values- are not exchange
values, are not bought and sold, like theories and relations) →
money cannot measure everything (e.g. some satisfiers
& some WBS are not expressible in money terms) and so
have to be expressed in their own terms (e.g.
education in terms of number of educational grades;
housing in terms of space per person & quality of
materials, etc.)
 Origins and problems of multidimensionality /II
As a consequence, variables for Poverty
Measurement (PM) might be:
-Direct or indirect, (income is indirect as it refers not
to the satisfaction of needs but to the level of the
(in)capacity to satisfy them given its income,
whereas years of schooling and quality of housing
materials, are direct);
-nominal, ordinal or cardinal (e.g. alternative
solutions for water provision are nominal (once
ordered become ordinal), whereas income is
cardinal);
This heterogeneity poses many challenges which I
have solved through IPMM and the Principles I have
formulated.
          The well-being sources
Well-being of a Household (HH) or a person,
depends on the following well-being sources:
1. Current income
2. Non-basic assets
3. Basic assets or family patrimony
4. Access to free goods & services (public
   consumption)
5. Knowledge and abilities
6. Available free time
(there‟s an additional slide on WBS)
2. Principles in the search for
 a better solution to problems
posed by PM especially when
     it is multidimensional
    The Principles of Poverty Measurement
1. Principle of Totality: All Needs, All Satisfiers, All
   Sources of Welfare (Resources)
2. Pr. of Diminishing Marginal Well-Being and of the
   Existence of a Maximum Well-Being Level.
3. Pr. of Comparability of Well-Being. (indicators must
   be re-expressed in objective W-B terms to be
   comparable)
4. Pr. of the Minimal Error
5. Pr. of replicable full cardinalisation or generalised
   dichotomisation
6. Pr. of the Entangled Nature of the Poverty Concept
7. Pr. of Dignity in the Definition of Poverty
   Thresholds
8. Pr. of poverty as part of the Living Standard Axis
9. Pr. of Symmetry
          Critique of the monetary solution
The monetary „solution‟ to (or evasion of ) the problem of
heterogeneity in the dimensions of well-being, implies the
following assumptions: 1) Only „material‟ N should be
considered; 2) G&S are the only S; 3) income is the only
WBS; 4) markets are universal: every N is satisfied
through them; 5) income (Y) is the natural indicator of WB;
6) WB is proportional to Y. Assumptions 1 to 3 constitute a
radical reductionism which violates the principle of totality.
Recognizing the limits of markets (rejecting assumption 4),
implies heterogeneity and that not only the total sum of
WBS matters but its composition as well. Assumption 5 is
rejected by Foster/Sen: “the metrics of exchange value
cannot give us interpersonal well-being comparisons”. N°
6° goes against common sense and against the tradition of
decreasing marginal utility (well-being) which implies that Y
and consumption cannot be used to evaluate WB without
being modified.
                    Note
• For the verbal presentation at the Second
  Peter Townsend Memorial Conference,
  given time restrictions, the explication of
  Principles of Poverty Measurement is
  skipped, but it is included in the electronic
  version of this Power Point file.
• Additionally, you have received in your
  pack a printed copy of my paper on these
  principles.
• We will continue with slide 21
         1. The Principle of Totality
All Needs (N): depart from the complete
   human being with all his/her N, without
   cutting off her/his brain, heart, genitals;
   without reducing him/her to cattle.
All Satisfiers (S), including relations,
   activities, capacities, institutions and
   knowledge/theories & not only G&S.
All well-being sources or resources.
Corollary: poverty is the incapacity of the
   household/person (given the totality of its
   WB sources) to satisfy all N.
2. Principles of diminishing marginal WB and of the
            existence of a maximum WB
To build objective WB measuring scales and advance in its
measurement we should: 1) define the normative threshold
(that divides WB from deprivation) as well as the absolute
minimum and maximum (this last applying the principle
enunciated below); 2) normalise the scales to homogenise
through all dimensions the ranges of variation and fix the
threshold at the same point. 3) Apply the principles of
diminishing marginal WB (DMWB) above the threshold and
the principle of the existence of a maximum WB, based on
the fact that C is the result of both T and G&S (Linder, 1970),
but personal total T cannot be augmented nor accumulated.
When G&S grow, effective C is limited by the existence of
the fixed time factor, which generates DMWB and the
absolute maximum, both of which should be expressed with
an appropriate WB function.
         3. Principle of comparability
For well-being (WB) indicators to be
comparable, all (including income), have to
be re-expressed in objective WB terms using
a measurement scale that has to be built. A way
to start building this common measurement scale
is normalising the range of indicators by defining:
1. the threshold: achievement indicator AI =1;
2. the worse, AI=0; &
3. the conceptual maximum, above which WB
can not be increased, AI=2.
          4. Principle of the minimal error
Some poverty „measurer's‟ argue that they do not include
other dimensions distinct from Y or that they do not
cardinalise ordinal indicators, because weights (and scores)
are difficult or impossible to find. Thus, while they recognize
the importance of the other WB dimensions, they carry out
income poverty measurements, apparently ignoring the fact
(or not giving importance to it) that they are thus assigning a
zero weight to other sources of WB, which is (most likely) the
largest possible error. The application of the principle of the
minimal error implies overcoming these difficulties always in
order to avoid the maximum error. Applying it implies not
very elegant work as well as daring to formulate value
judgements whenever necessary. Including the nonmonetary
dimensions in multidimensional poverty measurement, and
fully cardinalising them, are perhaps the two main tasks
where the principle of the minimum error is applied.
5. Principle of full replicable cardinalization or
         generalised dichotomisation
In almost all multidimensional poverty measurements
ordinal variables are converted into cardinality through
dichotomisation, in which the worse solution is given a
score of 1 and a score of 0 to the solution at the
normative threshold, but intermediate solutions are also
given a score of 1 even though they would deserve
intermediate scores –like 0.3, 0.7. Equally, the solutions
which are better than the norm are given a score of 0
although they would deserve negative deprivation
values. All this implies an enormous loss of information
which denies the principle of the minimal error (PME). In
IPMM I have been applying a full cardinalization which
rescues intermediate values and applies the PME. When
James Foster (2007) cast doubt on the replicability of my
procedure, I developed a replicable procedure:
generalised dichotomisation, which I explain now.
 Steps/rules for generalised dichotomisation
1) Order alternative solutions in n groups from worse to
   best in terms of objective well-being.
2) Define n-1 dichotomies each one taking as standard or
   threshold (TH) a different group of solutions (except the
   worse)
3) Define the ‘true’ threshold (m group).
4) Obtain the achievement matrix (n by n-1) of 0,1 scores
   (0: below TH; 1: on or above TH) for all n groups (rows)
   and n-1 dichotomies (columns).
5) ‘Average’ the scores of each group by dividing its sum
   by m-1 = groups from group 2 to group m (inclusive of
   both extremes). This ‘average’ is the cardinalised value
   of the achievement indicator (A) for each group.
6) Generalised dichotomisation generates equidistant
   cardinalisation; i.e. all values of A will be equidistant
   before rescaling
    Appraising generalised Dichotomisation
The experience of calculating IPMM poverty using
Generalised Dichotomisation (GD) allows me to derive the
following conclusions: 1. GD is equivalent to full
cardinalization. 2. It generates an equidistant cardinalization
with a long tradition in the social sciences (Sen, 1981). 3.
Empirical results are almost identical to the usual procedure.
4. GD will be preferred by those who attach more value to
replicability than to flexibility of judgement. 5. GD is the
optimal procedure to minimise errors in the presence of
ignorance but not when there is some knowledge on the
consequences of each solution. 6. GD does not entail
eliminating value judgements, which will be present in the
ordering of solutions and in the definition of the true
threshold 7. Full cardinalization is easily replicable through
GD and its benefits are huge: going from very precarious
methods to a method that allows for the calculation of all
aggregate measures. 8. With respect to dichotomisation, GD
always reduces measuring errors.
                   Principles, III
6. Entanglement Principle. The entangled nature
    of the poverty concept means that one cannot
    separate its description from its judgment/
    evaluation. Judgment is an intrinsic part of poverty
    studies.
9. The symmetry principle, which applies the rules
    of elementary algebra, implies that truncated
    poverty lines have to be compared with the
    corresponding disposable income concept. e.g.
    food poverty has to be compared with disposable
    income for food and not with total current income
    as done by World Bank, ECLAC and the Mexican
    Government.
      A typology of poverty
     measurement methods
(with emphasis on MPMM, the truly poor and
     the two official methods prevailing in
                    Mexico).
Typology of Poverty Measurement Methods
Direct and combined methods
                      Note
• For the verbal presentation, at the Second Peter
  Townsend Memorial Conference, given time
  restrictions, I will skip discussion of the non-
  combined methods with two exceptions, both
  direct multidimensional methods: UBN which is
  incorporated in both official MPMM being
  applied in Mexico, and Enforced Lack of Socially
  Perceived Necessities (Mack and Lansley) as it
  has been the origin of the truly poor approach.
  On the other hand, I will skip the first two
  combined methods listed in the previous slide.

• So we will continue with slide 31
         PL, Normative Food Basket (NFB)
This is a semi-normative method as it combines a
normative stand on food with a non-normative (empirical)
position on all other needs. In all variants a normative
food basket is defined and its cost is divided by the
Engel coefficient, E, or proportion of household income
allocated to food by households, to obtain the PL. In
some applications (e.g. ECLAC and Government of
Mexico 2000-2006) the cost of the FNB is considered
the extreme or food PL. What distinguishes variants is
yhe group in which they observe E. Some select the
poor for this observation, others, the whole population
(M. Orshansky, who is the original designer of the
procedure). A 3th option is a reference stratum identified
as satisfying its nutritional requirements (ECLAC). I have
shown that the orthodox application of the third option
implies measuring food poverty (i.e. households which,
given their income, cannot buy the FNB) but that ECLAC
has not been orthodox.
          Food expenditure vs NFB cost.
This is the obvious alternative to the NFB approach. It
compares the amount spent by a household on food with
the appropriate cost of the NFB. Boltvinik & Damián have
applied it to Mexico, with the surprising result that it
identifies the largest proportion of poverty as compared to
all poverty measurement methods applied in Mexico. Its
classification as direct or indirect method is not obvious.
What the method identifies are households which, given
the amount spent on food are potentially capable (or not)
of meeting food needs, but there is no direct observation
that, for instance, the composition of the amount
consumed is such that nutritional needs are also met. For
these reasons I have classified it as indirect one-
dimensional method for the purposes of the typology. In
Section B I show that this procedure can be derived as a
food poverty line from the FNB method.
Generalised Norm Basket (GNB)/Budget Standards
An entirely normative PMM. A complete normative
basket of goods and services is defined. Its cost is the
PL. It is the oldest (Rowntree) PMM but is seldom used
(an exception is Mexico). In the UK, Bradshaw et al.
have defined budget standards but did not use them to
measure poverty. The arguments against it are very
weak. Let‟s take shoes. Every body agrees that it is
shameful (and potentially harmful) to walk barefooted.
Thus expenditure on shoes should be included in the
GNB. With the argument that it is very difficult, or
arbitrary as Atkinson says, to define the quality and
quantity of shoes, these analysts end up including a total
amount of expenditure (income) for all non-food items (a
black box) in which they cannot be sure if any
expenditure for shoes is included or not, thus leading to
higher errors than those committed when not avoiding
the ‘difficult’ or ‘arbitrary’ decisions.
           PL. Subjective Poverty Lines
The variants included under this heading define the
threshold on the base of the opinions (perceptions) of
interviewed population. There are basically two
procedures: 1) The MIQ (minimum income) question
addressed in terms of the income necessary for any
household of a given size and structure. Average
response to this question renders the PL. The other
procedure requires the interviewed population to specify
the income level which, for their own specific conditions
they would qualify as “very bad”, “bad”, “insufficient”,
“sufficient”, “good” & “very good”. Their current income is
also registered. From that point, 2 procedures can be
used, but the most transparent one is to estimate the
media of all those who consider their own current income
as sufficient. Although I have classified both procedures as
normative, only the MIQ is really such.
      Income–time poverty (Vickery; Boltvinik)
Vickery defines 2 poverty thresholds: income (M 0) and available
adult hours for household management (T0). HHs in M 0 require
more time (T1), and those in T0 require more income (M 1). The
line uniting M 0 T1 & M 1 T0 is the income-time poverty
threshold. In the first point all domestic work is carried out by
HH members; in the second all domestic work is performed by
hired persons. In IPMM Boltvinik identified time poverty with an
index of excess extra domestic work (EW). Norms are set on
how many hours a week can an available person work extra
domestically, domestically, or the sum of both. Time required
for domestic work is calculated as dependent on size of HH,
presence of small children, and an index of domestic work
intensity based on a set of indicators. Total weekly available
time minus domestic net work requirements (net of domestic
work performed by paid personnel) renders available time for
extra domestic work, which is compared with observed hours of
weekly extra domestic work to obtain EW. Current income is
divided into EW to obtain “income without EW and performing
required domestic work”. Introduction of the time dimension
changes radically the nature of PMM.
 Townsend’s Deprivation Index & Desai-Shah
            Improved Variant.
Townsend calculated a deprivation index which can be seen as a
direct method. This he did in chapter 6 of his great book with 2
indicators which he chose for heuristic purposes from the 60 he
had built. Although Townsend did not go to identify poverty with
this index, this can be done if a poverty criterion is defined (e.g. a
score of 2 or more). Desai and Shah proposed to use a
continuous measure which can be used for each HH and which is
adequate to calculate aggregate poverty measures, thus
overcoming some of the limitations of Townsend‟s Index. In other
words they propose full cardinalization, beyond dichotomies, but
they do it by expressing all consumption experience as events,
whose frequency can be obtained by a questionnaire and then the
modal frequencies become the normative values. Having
frequencies below the norms, due to lack of resources is a sign of
deprivation. Lack of resources is separated from tastes through
econometric analysis. It has not been applied.
 Combined Poverty Measurement Methods.
There is a generalised move to multidimensional
combined PMM. In Europe it has had the main purpose
of combining direct deprivation due to income
restrictions with income restrictions themselves* (Nolan
& Whelan, Gordon et al.; Halleröd; Pantazis, Gordon &
Levitas), whereas in LA the point of departure was that
direct & indirect methods are complementary as they
take into account different WBS & identify deprivation in
different (and not necessarily correlated) dimensions. It
is this difference which explains their divergent poverty
criteria: while the “truly poor methods” identify as poor
only those in the intersection of both sets, IPMM does
not restrict the poor to the intersection**, as it is the
overall poverty index for each household that determines
its poverty condition. Thus, “the truly poor” methods end
up reducing their object of study to the consequences of
a low level of current income, reducing the 6 WBS to 1
(see below).
Unsatisfied Basic Needs Original variant. (UBN-OV).
The observed condition in each HH in each (non-
income) dimension is compared with the specific
threshold and a dichotomy (0,1) is built: on or above
the threshold (SBN) and under the threshold (UBN).
Any HH with one or more UBN is considered poor
(i.e. if the sum of scores is equal or larger than 1). It
is a union approach poverty criterion (within HH).
This procedure allows the calculation of only the
head-count (H) but not of any other aggregated
poverty index, not even the poverty gap (I).
More damaging, the poverty criterion leads to
poverty incidence being a positive function of
the number of items (needs) included, which is an
unacceptable feature for any measurement method
(shared by ELSPN).
      UBN- IV (UBN Improved Variant) / I
This variant (which I developed around 1991) :
1) Allows proper calculation of all aggregated
   poverty indices; 2) H is not any more a function of
   the # of indicators included.
In order to achieve these features,
1) Dichotomic indicators are transformed into fully
   cardinal scales, and original cardinal indicators
   are re-scaled. This is done for the purpose of
   expressing objective well-being attained by
   each HH in each indicator.
2) Indicators are combined using weights based on
   the share of each in total normative costs (this is
   not the only reasonable weighting procedure) to
   obtain the overall index for each household, which
   goes beyond the intersection/union dilemma.
Enforced Lack of Socially Perceived Necessities
          (ELSPN) (Mack/Lansley) / I
To avoid Piachaud‟s criticism that in Townsend‟s
index many indicators reflect tastes rather than
deprivation, M&L introduced the concept of
“enforced lack” (EL), identifying deprivation only
when a given lack is due to a declared inability to
pay. This way of proceeding assumes that
restriction in current income is the only
possible source of deprivation. It begs the
question on the sources of well-being. As this
work was the point of departure for a whole
generation of combined methods (the truly
poor), this fact generated a “birth mark” in all of
them, reproducing this bias.
           (ELSPN) (Mack/Lansley) / II
Definition of necessities is based on majority
perceptions. The poverty criterion (quite arbitrary and
empirically selected on the basis of observed
correlation with income) is that 3 or + EL (from a list
of 26 SPN) constitutes poverty. By adopting
dichotomic indicators and not calculating an overall
index for every HH, the poverty gap I cannot be
properly calculated, nor can the more elaborated
poverty aggregated measures. It shares with UBN-
OV the very damaging feature that poverty incidence
(H) becomes a positive function of the # of items
considered. Every time one adds a new item poverty
raises unless the poverty criterion is modified, but
then on what basis and with what comparability?
                 Note
• As announced, I will skip slides 37
  and 38
  Objective Poverty Line (Townsend, Gordon)
Townsend uses his deprivation index to reveal the
“objective PL”. He adjusted two straight lines to a
scatter diagram depicting deprivation indices and
current income of his surveyed HH. The objective PL
is revealed where deprivation starts growing faster
per unit of decrease in income. It is a combined
method in a very special sense. Poverty is measured
only by income, but the PL is identified using
observed association between income and
deprivation. Townsend & Gordon did a similar
exercise using discriminatory analysis to identify the
PL. It is the search “for the Holly Grail” (Piachaud):
an objective PL which avoids value judgments.
    Revealed or Objective UBN Thresholds
This method as applied by Progresa/ Oportunidades
divides the population into 2 groups on the base of an
extreme PL = to the cost of a food basket assuming HH
can spend 100% of their income on raw food, and then
correct the initial grouping on the bases of discriminatory
analysis. For each of the preliminary groups of poor and
non-poor a new one-dimensional variable Z is
calculated, which is a weighted average of the selected
variables, the weights being determined internally by the
model to maximise the distance between the means of
the poor ZP from that of the non-poor, ZNP. These means
are multivariate centroids that typify the profile of the two
groups of families. A family is classified in the group with
regard to whose centroid it bears less distance. This
procedure is the mirror image of the Townnsend-Gordon
one. The way Progresa/Oportunidades applies
discriminatory analysis (using only one PL instead of a
set of them) minimizes extreme poverty.
  Well-being sources & the critique of „partial poverty
  measurement methods‟: point of departure of IPMM.
 Type of WBS             Specific WBS         Methods which take into     Consequences
                                              account specific WBS

          Private   1. Current monetary       PL (income poverty)         PL only considers source 1
                    and non-monetary                                      and, sometimes, source 2.
                    income
                                                                          UBN-OV usually considers
                    2. Non-basic assets       PL                          sources 3 & 4 and sometimes
„Eco-                                         (only when measured using   source 5
nomic‟                                        consumption expenditures
resourc                                       instead of income)          None takes into account
es                                                                        available free time (source 6).
                    3. Basic assets           UBN-OV

          Public    4. Access to free goods   UBN-OV                      In consequence, both
                    and services (public                                  methods are partial and
                    consumption)                                          order HH incorrectly; they
                                                                          are not alternatives but
“Capacities”        5. Knowledge and          UBN-OVNBI (some             complementary methods.
                    abilities                 aplications)

Available Time      6-Free time               None
    Integrated Poverty Measurement Method.
           Original Variant (IPMM-OV)
Beccaria/Minujin, trying to find out whether UBN-OV and
PL-NFB methods identified the same HH as poor (the
answer was, of course, negative) applied both methods
to the same HH obtaining a contingency table in which
HH were classified in 4 categories: poor on both, non-
poor on both, poor only by UBN and poor only by PL,
which Boltvinik (1990) identified as a new method
(IPMM) and UNDP applied widely in LA. IPMM-OV
allows distinguishing population recently impoverished
(the poor only by PL), the more structural type of poverty
(poor on both counts) and the poor on assets & publicly
provided goods (poor only by UBN). The poverty
criterion adopted, derived (logically & consistently)
from the complementary nature of both methods as
they consider different WBS (previous slide), is that
the poor are those identified by the union of both
sets.
   Limitations of IPMM-OV (Original variant)
It considers more WBS than any of the 2 partial
methods, but carries on their defects and adds
one more: 1) “Food only”: FNB-PL measures only
food poverty; 2) “Dependency”: H(UBN) is not
independent of the # of indicators; 3) “inability”: it
cannot calculate IJ; 4) “partiality”: it does not
consider free time and knowledge/abilities;
5)“Union approach”: the poverty criterion is
difficult to defend in extreme cases: a millionaire
not sending his child to school is identified as
poor.
       IPMM-IV (Improved variant).
    Overcomes limitations of IPMM-OV
Combines UBN-IV, BA-PL (budget approach definition of
PL) and Excess Work index of time poverty to obtain
I(IPMM)J. Overcomes IPMM-OV limitations: (1) “Food
only” limitation is overcome by adopting BA-PL.
Limitations (2)-(3) (“dependency” and “inability”) are
overcome by adopting UBNM-IV; limitation
(4),”partiality”, by including educational level in UBN &
incorporating time poverty; and (5) adopting I(IPMM)J>0
as poverty criterion it includes compensations and
overcomes the “union approach” (note: it does not adopt
the intersection approach).
         IPMM. Integration procedure
The PL in IPMM-IV is the cost of the Normative Basket
(budget approach) minus the cost of items verified by
UBN (e.g. dwelling). Thus, Y is disposable income (YdJ)
for items included in PL, and is combined with the time
deprivation indicator (EWT):
YdTJ = YdJ / EWT
The achievement income-time indicator is: YTA= YdT /
PL. YTA>0 values are rescaled to express objective
well-being (YTA’J). The deprivation indicator, income-
time poverty intensity is: YTD’J = IYTJ = 1- YTA’J
To obtain the poverty gap (intensity) for HH J, I(UBNM)J
and YTD’J are averaged, using as weighs their
participation in total costs (K) (reflecting social cost of
poverty eradication) :
I(IPMM)J = I (UBNJ) (KUBN) + I(YT)J (KYT)
The truly poor (Nolan/Whelan; Gordon et al. etc.)
The „truly poor‟ approach departs from Townsend‟s
poverty definition and from M&L concept of “enforced
lack” (EL). N&W show that correlation between income
poverty and EL is not very high (rediscovering
Beccaria/Munujin). They identify poverty (defined as
exclusion due to lack of resources) when a HH has
at least one EL item and is below a purely relativist
poverty line (less than 60% of median HH income),
which I have classified in the typology as non-
normative, thus adopting the intersection approach
considering poor only those households in cell 1.1
(first row, first column) labelling them as consistently
poor by N&W. Gordon et al. also regard as poor the
households in cell 1.1 only, identified as those having
2 or more EL items and below a poverty line estimated
statistically according to its association with EL (?).
   Dual cut-off counting (Alkire-Foster; Foster)
It uses the counting-based approaches “that have
appeared in the sociology literature”. The identification of
the poor is accomplished with the help of two types of
cut-offs: the domain-specific poverty cut-off, with a
person being deprived in that dimension if the
achievement falls below the cut-off. Second is a cross-
dimensional cut-off that indicates the minimum range of
deprivations necessary before a person is considered to
be poor. Each dimension of well-being is given a weight
(usually equal weights) with all weights summing to one.
A person is considered poor if the sum of the weights in
the dimensions he/she is deprived exceeds (or equals)
the specified cut-off, and non-poor if it is less. Note that
this, now highly fashionable procedure, can be seen as
UBN-OV (except that one of the dimensions can be
income) in which the union approach has been
substituted by an arbitrary number of deprivations (or
sum of weights) as a threshold.
       Modified truly poor (Coneval, Mexico)
By law, poverty measurement in Mexico has to be multi-
dimensional (the law specifies 7 dimensions) and has to be
carried out by a semi-independent agency, Coneval. The
official method announced by Coneval is a variant of the
intersection approach or truly poor, thus underestimating
poverty: in order to be considered poor a HH has to be both
below the PL (defined by a quasi budget approach) & depri-
ved in 1 or more (of a total of six) UBN dimensions. But
within UBN the method adopts a union approach, in
which only 1 deprivation is enough to be considered
„vulnerable‟, overestimating „vulnerability‟ . To compensate
for this, UBN thresholds are set at a very low level indeed.
Population in cells 1.2 & 2.1 are considered vulnerable (but
not poor) thus creating a dual calculation of disadvantage:
poverty and poverty + vulnerability (next slide)

								
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