Confronting crisis; a comparative study of household responses to poverty and vulnerability in four poor urban communities

Abstract

This paper analyzes the consequences of an alternative weighting scheme for the Multidimensional Poverty Index (MPI), using a data-driven approach, as opposed to the currently employed equal weighting scheme. This weighting scheme has been under strong scrutiny since the MPI's inception, given the sensitivity of country rankings to different weights and indicator choices. Therefore, the current study employs Multiple Correspondence Analysis (MCA) for weighting of the indicators and investigates its impact on the scores and relative ranking of 28 countries. The results show that equal weighting of the three dimensions cannot be statistically justified. Moreover, the statistical weights differ systematically across countries, implying differences in deprivations across regions, although household poverty rankings are highly correlated between normative and statistical weights. Given the high correlation between all indicators employed within the MPI, a large overlap is found in the information, implying that there might not actually be so much multidimensionality within the dimensions of the MPI.