Measuring Vulnerability to Multidimensional Poverty

Abstract

A method to measure vulnerability to multidimensional poverty is proposed under a mean–risk behaviour approach. We extend the unidimensional downside mean–semideviation measurement of vulnerability to poverty towards the multidimensional space by incorporating this approach into Alkire and Foster’s multidimensional counting framework. The new approach is called the vulnerability to multidimensional poverty index (VMPI), alluding to the fact that it can be used to assess vulnerability to poverty measured by the multidimensional poverty index (MPI). The proposed family of vulnerability indicators can be estimated using cross-sectional data and can include both binary and metric welfare indicators. It is flexible enough to be applied for measuring vulnerability in a wide range of MPI designs, including the Global MPI. An empirical application of the VMPI and its related indicators is illustrated using the official MPI of Chile as the reference poverty measurement. The estimates are performed using the National Socioeconomic Characterisation Survey (CASEN) for the year 2017.