MULTIDIMENSIONAL POVERTY: THEORY AND EMPIRICS

Paper 2: Individual Specific Weighting Scheme to a Multidimensional Poverty Measure Abstract Weights in the estimation of multidimensional poverty have a central role by showing the relative importance of dimensions. This paper proposed two differentweighting schemes: endowment and distributional based weighting schemes.The later weighting scheme gives more weight to the dimension with small number of deprived individuals. On the other hand, the endowment based weighting scheme gives more weight to the dimension with large number of deprived individuals. The proposed weighting schemes considerboth distributional equity and simultaneous deprivations of indicators. Using the Ethiopian rural household survey (ERHS) data for the year 2004, the paper compared the proposed weighting schemes with the equal weighting scheme approach. The empirical result showed that, the multidimensional poverty index (MPI) estimation using endowment based equity weight has a lower estimate than the equal weighting approach. This happened because the indicators that have a small number of deprived individuals have got a higher weight under the equal weighting approach.