International Pension Workshop Parallel session 4

Transcription

1 International Pension Workshop Parallel session 4 Discussant Alternative weighting structures for multidimensional poverty assessment Discussant: Ruud. J. A. Muffels Tilburg University / ReflecT- Research Institute for Flexicurity, Labour Market Dynamics and Social Exclusion International Pension Workshop January 2014

2 Rich paper with a lot of nice ideas Axiomatic approach to poverty measurement fitting to a welfare economic treatment (Bourguignon, Chakravarty, Atkinson, Foster, Alkire etc.). Important axioms: Monotonicity and Transfer axiom + for policy reasons decomposability by groups Adjusted headcount following Sen s approach but with sophisticated weighting system Multidimensional poverty index instead of unidimensional (income/wealth/consumption) incl. income, wealth, mental health, housing (joint distribution; trade-offs) Weighting scheme: Adding a hybrid scheme (value judgements + data-driven) based on life satisfaction self-assessments (coefficient estimates of ordered probit regressions) Correction for inter-personal heterogeneity in response styles of life satisfaction question using vignettes International Pension Workshop Jan. 2014

3 Methodology Multidimensional poverty: identification (poverty threshold) and aggregation (arrive at index) on censored distribution Selection of dimensions+indicators; determine indicator cutoffs, assignment of dimensional weights, overall poverty cutoff (number of deprivations to be called poor) From poverty to well-being: achievement scores on five components; weighted overall achievement score s h Poor when s h < φ (indicator cut-offs and overall WB TH) Decomposable by subgroups with population shares as weights Changes in weights affects the entries and exits of poverty Anti-poverty policies better not only focus on the indicators with highest weights but also on the number of exits Using cross-sectional 2006 Share data on 50+ people International Pension Workshop January 2014

4 Few comments: some observations and concerns Theoretical: Set of achievements also proxy of objective well-being? Based on outcomes/functionings in Sen s vocabulary not on capabilities to achieve things in life. Five components but no information on social networks, little on mobility (due to data limitations?) Set of indicators and definition of cut-offs appears age/life-cycle specific? Hedonic weighting already controls for age and household specificity. Arbitrary choice of well-being cut-offs. Expert views or focus groups consultation better option? Relevant for measuring purposes but not for causal interpretations (behavioral model), Why question? International Pension Workshop January 2014

5 Few comments: some observations and suggestions for future research Theoretical: Poverty is seen as relative concept but the idea of social comparison is not incorporated except possibly in the hedonic weighting scheme The treatment of poverty is atemporal whereas what matters is the prolonged duration of the relative shortfall over time (see recent paper by Clark & D Ambrosio, 2013). International Pension Workshop January 2014

6 Methodology Cross-sectional Share data on 50+ instead of longitudinal EU SILC or national panel studies data on 15+ because of vignette information? Are the results sensitive to defining different cut-offs when applying the methodology to the EU-SILC data for people 15+? Are intra-personal response styles also different over time? Benchmark or reference point differences The common set of indicators must be representative for all countries with country specific multidimensional poverty measures? Overall life satisfaction assessments are used for hedonic weighting: why not domain satisfaction scores? International Pension Workshop January 2014

7 Policy Focus on joint distribution of disadvantage instead of marginal distributions is relevant for policies since policies need to deal with trade-offs and cumulative processes. Identification of the truly deprived? Politicians prefer the headcount for its simplicity. Multidimensional measures are too complex and require normative and arbitrary decisions. Lack of consensus. Multidimensional poverty measures do not fit to the policy formation process. Each domain requires specific intervention strategies. Policies better address the causes of disadvantage or people s behavior then repairing the outcomes(preventive strategies). International Pension Workshop January 2014