Sensitivity Analyses in Poverty Measurement

The Case of the Global Multidimensional Poverty Index

This event examines the following paper: Sensitivity Analyses in Poverty Measurement: The Case of the Global Multidimensional Poverty Index

This paper provides an extensive sensitivity analyses of the global multidimensional poverty index (MPI), a counting-based measure of acute poverty covering over 100 developing countries. Empirically, the paper probes the sensitivity of poverty measures and comparisons to modifications in key parameters. Outcomes studied include the adjusted headcount and headcount ratios and their subnational rankings, as well as the exact set of people who are identified as poor. The parameters that are adjusted include the poverty cutoff, weights or deprivation values, and indicators. 

Broadly speaking, the results suggest that parameter choices can make a difference, which is consistent with the fact that often dominance results may not emerge. Specifically, the evidence suggests that fundamentally different parameters may substantially change the performance of the entire poverty measure or even its very nature (e.g., for a union cutoff or extreme weighting schemes). However, the results also suggest little sensitivity of outcomes when changing parameters within plausible ranges.

This event is co-sponsered with OPHI