Analyzing Multidimensional Well-Being

Chapter 3A Synthesis of Multidimensional Poverty

3.1 Introduction

Poverty remains a burning problem in many countries of the world even in the early twenty-first century. Many people in such countries and in many relatively rich countries as well need to struggle in making ends meet. Consequently, removal of poverty continues to be one of the major economic policies for many people in the world.

We have argued explicitly in earlier chapters that well-being of a population is a multidimensional phenomenon (see Stiglitz et al., 2009). Hence, poverty can be regarded as a manifestation of insufficiency of achievements in different dimensions of well-being. The emphasis on multidimensionality of poverty arises from the cognizance that income by itself cannot capture many important factors that may downgrade a person to poverty. Reckless spending by a very wealthy person on consumption of unhealthy food items is likely to deteriorate health status. In other words, this income-rich person becomes deprived in health dimension of well-being. A wealthy person cannot increase the quantity of an inadequately supplied public good by spending money on his own.

In a study for Montevideo, the capital of Uruguay, Katzman (1989) noted that 13% of households were poor in the income dimension but did not encounter deprivation with respect to basic needs and the opposite happened for 7.5% of the households. Ruggeri Laderchi (1997) employed Chilean data to conclude that income alone is unable to ...