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Poverty in Canada: Unidimensional and Multidimensional Measures
Presented by: Lori J Curtis, PhD
Department of Economics
IARIW-BOK Conference, Seoul South Korea, April 26-28 2017
Unidimensional Measures
of Poverty
Can a single measure, such as GDP/capita, income or expenditure, adequately represent the experience of poverty (Atkinson, 2003; Sen, 2006)?
Multidimensional Measures
of Poverty
Is aggregating multiple measures of attainments or deprivations into a single multidimensional measure better?
subjective measures
Weights
Cut-offs
Background
IARIW-BOK Conference, Seoul South Korea, April 26-28 2017 PAGE 2
Background
GDP measures have been used as an indication of the economic well-being (UNDP, 2016).
viable indicator of aggregate economic growth
limited as a description of the experience of wellbeing
household production or the underground economy?
health, leisure, environment, political freedom, or social justice?
Income/expenditure historically commonly used measure in micro-level poverty studies.
household production?
health, leisure, environment, political freedom, or social justice?
IARIW-BOK Conference, Seoul South Korea, April 26-28 2017 PAGE 3
Background
Multidimensional measures of well-being/poverty gaining traction.
In developing countries
Multidimensional Poverty Index (MPI) (Alkire & Santos, 2010)
Human Development Index (UNDP, 2010)
Beginning in developed countries
European Union (Alkire et al., 2014, Whelan et al 2014).
US (Mitra & Brucker, 2014; Dhongde & Haveman, 2015).
Canada (UNDP, 2016; Canada Index of Wellbeing, 2016)
IARIW-BOK Conference, Seoul South Korea, April 26-28 2017 PAGE 4
Background
PRESENTATION TITLE PAGE 5
Background
PRESENTATION TITLE PAGE 6
Background
PRESENTATION TITLE PAGE 7
Background
Some countries have developed survey instruments for MDPI (see for example the Global MDPI project at http://www.ophi.org.uk/).
Some have high quality longitudinal survey data to develop the instruments
EU-SILC data in the European Union (Alkire et al., 2014, Whelan et al., 2014)
Germany – SOEP (Suppa, 2016)
Others parse together indicators using available data
American Community Survey (Dhongde & Haveman, 2015)
Current Population Survey and American Community Survey data (Mitra & Brucker, 2014)
IARIW-BOK Conference, Seoul South Korea, April 26-28 2017 PAGE 8
Data
This study compares constructed MDP measures with ‘traditional’ measures of poverty using multiple nationally representative data sources (pumf files)
Cansim tables 384-0038 and 051-0005 are used to calculate the growth in GDP/capita over time. (http://www5.statcan.gc.ca/cansim)
Survey of Household Spending (SHS) – 2003, 2005, 2007, and 2009
Canadian Community Health Survey (CCHS) - 2003, 2005, 2007, 2009, and 2012
Waiting for access to Master files of SHS and CCHS
IARIW-BOK Conference, Seoul South Korea, April 26-28 2017 PAGE 9
Methods
Growth GDP/capita is % change in annual expenditure based real GDP/population (chain-linked).
SHS Income and expenditure measures are estimated per Crossley and Curtis, 2006.
Households are considered poor if they have adjusted income or expenditure ≤ 0.5*median.
MDP dimensions, indicators, and thresholds a la Dhongde & Haveman’s (2015)
CCHS indicators are reported for households
Statistics Canada weights are multiplied by household size poverty head counts.
Paper presents sensitivity analysis of many measures – here present growth in GDP/capita, income and expenditure from SHS, Multidimensional from CCHS
IARIW-BOK Conference, Seoul South Korea, April 26-28 2017 PAGE 10
Multidimensional Poverty Dimensions and Indicators
Dimensions Indicators
Health
No Regular MD Household does not have a regular
family physician
Disability A household member is limited in
activities by a disability
Education
No High School Highest adult educational level in
household is less than high school
certificate
No Eng/Fr
Speaker
No one in household speaks an official
language
Standard of
Living
No Employment Major source of household income is
not employment income
Low Income Household income (adjusted) is in the
bottom quintile of the income
distribution.
Housing
Do Not Own
Home
The house is not owned by a member of
the household
Crowded There is not a bedroom for parent(s)
and each child
Food Insecure Food Insecure IndexIARIW-BOK Conference, Seoul South Korea, April 26-28 2017
Mutlidimensional Poverty measure - CCHSSensitivity
MDP1 = No MD + Disability + No High school + No Eng/Fr + No employ income+ low income + crowded + house not owned
MDP3 = No MD + Disability + No High school + No Eng/Fr + No employ income+ low income + food insecure + house not owned MDP 5 = MDPH without language (SHS comparison)
MDP 7 = MDP H dropping PEI and NB (not available in 2009)
MDP2 = MDP1 without home ownership
MDP 4 = MDP 3 without home ownership
MDP 6 = MDP 5 without home ownership
MDP 8 = MDP 7 without home ownership
MDP(H) = MDP1 (03 – 07) and MDP3 (09-12)
MDP(NH) = MDP2 (03 – 07) and MDP4 (09-12)
IARIW-BOK Conference, Seoul South Korea, April 26-28 2017
Indicators in CCHSProportion of Individuals with stated Indicator in CCHS
2003 2005 2007 2009 2012
No MD 0.1413 0.1437 0.1597 0.1589 0.1545
Health
0.0014 0.0014 0.0015 0.0015 0.0021
Disability 0.1068 0.1116 0.1064 0.0901 0.1121
0.0012 0.0013 0.0012 0.0012 0.0019
No High school 0.0479 0.0366 0.0962 0.0889 0.0925
Education
0.0009 0.0008 0.0012 0.0012 0.0017
No Language 0.0148 0.0110 0.0148 0.0142 0.0083
0.0005 0.0004 0.0005 0.0005 0.0005
No Employ Income 0.0453 0.0433 0.0479 0.0484 0.0518
Standard of
Living
0.0008 0.0008 0.0009 0.0009 0.0013
Low Income 0.0638 0.1468 0.1480 0.1500 0.1402
0.0010 0.0014 0.0014 0.0015 0.0020
No Own Home 0.2080 0.1946 0.2213 0.2148 0.2353
Housing
0.0016 0.0016 0.0017 0.0017 0.0025
Crowded 0.1283 0.1024 0.1013
0.0013 0.0012 0.0012
Food Insecure 0.0813 0.0663 0.0806
0.0014 0.0010 0.0016
*Canadian respondents 25 to 64 years of age (2009 where PEI and NB are excluded – see text for explanation)
IARIW-BOK Conference, Seoul South Korea, April 26-28 2017
Tetrachoric
Correlations between
Indicators
CCHS 2007
No
Regular
MD
Disability No
High
School
No
Empl
Inc
Low
Income
Not
Own
Home
Crowd Food
Insecure
No
English
Speaker
No Regular MD 1.0000
Disability -0.1510
No High School 0.0485 0.3201 1.0000
No Employment
Income 0.0620 0.4360 0.4106 1.0000
Low Income
0.1345 0.3419 0.3911 0.6926 1.0000
Does Not Own Home
0.3008 0.1574 0.2310 0.4702 0.5933 1.0000
Crowded
(<1 rm/person) 0.1562 -0.0069 0.1579 0.3071 0.4966 0.4783 1.0000
Food Insecure
0.1076 0.3717 0.2949 0.5514 0.6394 0.5173 0.3963 1.0000
No English Speaker
0.0651 0.0423 0.3188 0.2297 0.4209 0.2635 0.2695 0.2522 1.0000
IARIW-BOK Conference, Seoul South Korea, April 26-28 2017
Correlation Matrix
Multidimensional Poverty
Counts
CCHS 2007
MDP1
Count
MDP2
Count
MDP3
Count
MDP4
Count
MDP5
Count
MDP6
Count
MDP7
Count
MDP8
Count
MDP1 Count1.0000
MDP2 Count0.9460 1.0000
MDP3 Count
0.9528 0.8937 1.0000
MDP4 Count
0.8826 0.9296 0.9455 1.0000
MDP5 Count
0.9945 0.9376 0.9470 0.8739 1.0000
MDP6 Count
0.9388 0.9917 0.8859 0.9207 0.9439 1.0000
MDP7 Count
0.9516 0.8832 0.9038 0.8196 0.9561 0.8879 1.0000
MDP8 Count
0.8887 0.9269 0.8354 0.8558 0.8925 0.9333 0.9448 1.0000
IARIW-BOK Conference, Seoul South Korea, April 26-28 2017
Tetrachoric
Correlations
Multidimensional
Poverty Score ≥ 2
CCHS 2007
MDP1
Count ≥ 2
MDP2
Count ≥ 2
MDP3
Count ≥ 2
MDP4
Count ≥ 2
MDP5
Count ≥ 2
MDP6
Count ≥ 2
MDP7
Count ≥ 2
MDP8
Count ≥ 2
MDP1 Count ≥ 21.0000
MDP2 Count ≥ 20.9791 1.0000
MDP3 Count ≥ 20.9708 0.9436 1.0000
MDP4 Count ≥ 20.9408 0.9632 0.9693 1.0000
MDP5 Count ≥ 20.9949 0.968 0.9684 0.9312 1.0000
MDP6 Count ≥ 20.9792 0.9946 0.9389 0.9518 0.978 1.0000
MDP7 Count ≥ 20.9619 0.9289 0.935 0.8798 0.9682 0.9349 1.0000
MDP8 Count ≥ 2 0.9361 0.9591 0.8943 0.9043 0.9364 0.9602 0.9619 1.0000
IARIW-BOK Conference, Seoul South Korea, April 26-28 2017
0.0000
0.0500
0.1000
0.1500
0.2000
0.2500
MDP H MDP NH MDPC 1 MDPC 2 MDPC 3 MDPC 4 MDPC 5 MDPC 6
Pro
po
rtio
n o
f P
op
ula
tio
nSensitivity Analysis
2003 2005 2007 2009 2012
IARIW-BOK Conference, Seoul South Korea, April 26-28 2017
0
0.05
0.1
0.15
0.2
0.25
2003 2005 2007 2009 2012
Pro
po
rtio
n o
f P
op
ula
tio
nPoverty Measures with and without NB and PEI
MDP H MDP NH MDPsm H MDPsm NH
Economics
-0.05
0
0.05
0.1
0.15
0.2
0.25
GDP/cap Income Expend MDP H MDP NH
Pro
po
rtio
n o
f P
op
ula
tio
n
Well being/Poverty Measures
2003 2005 2007 2009 2012
IARIW-BOK Conference, Seoul South Korea, April 26-28 2017
0
10
20
30
40
50
60
2003 2005 2007 2009 2012
Per
cen
t o
f P
op
ula
tio
nMDP Counts with Housing CCHS
0 1 2 3 4 5 6 7 8 mdp1u mdp1i mdp≥2
IARIW-BOK Conference, Seoul South Korea, April 26-28 2017
0
10
20
30
40
50
60
70
2003 2005 2007 2009 2012
Per
cen
t o
f P
op
ula
tio
nMDP Counts without Housing CCHS
0 1 2 3 4 5 6 7 mdp2u mdp2i MDP
IARIW-BOK Conference, Seoul South Korea, April 26-28 2017
Multidimensional Poverty Index, MPI (𝑀0)*
2003 2005 2007 2009 2012
M0 (H) 0.056 0.061 0.073 0.066 0.073
M0 (NH)
0.032 0.038 0.047 0.041 0.044*weighted average deprivations experienced by the multidimensional poor.
IARIW-BOK Conference, Seoul South Korea, April 26-28 2017
IARIW-BOK Conference, Seoul South Korea, April 26-28 2017
0
1
2
3
4
5A
tla
nti
c
QU
E
ON
T
Pra
irie
s
BC
Atl
an
tic
QU
E
ON
T
Pra
irie
s
BC
Atl
an
tic
QU
E
ON
T
Pra
irie
s
BC
Atl
an
tic
QU
E
ON
T
Pra
irie
s
BC
2003 2005 2007 2009
Ra
nk
ing
Regional Ranking by Measure
GDP Income Exp MDP H MDP NH
Income, Expenditure & Multidimensional Poverty by Family Type
2003 2005 2007 2009
Inc Exp
MDP
H
MDP
NH Inc Exp
MDP
H
MDP
NH Inc Exp
MDP
H
MDP
NH Inc Exp
MDP
H
MDP
NH
Single 0.22 0.04 0.40 0.22 0.21 0.03 0.41 0.24 0.21 0.04 0.43 0.26 0.19 0.02 0.44 0.27
Couple 0.05 0.02 0.14 0.07 0.06 0.02 0.14 0.08 0.04 0.01 0.17 0.10 0.04 0.01 0.17 0.10
Two
Parent 0.06 0.02 0.14 0.09 0.07 0.02 0.15 0.11 0.07 0.03 0.17 0.13 0.07 0.02 0.14 0.10
Lone
Parent 0.28 0.07 0.41 0.26 0.27 0.06 0.44 0.33 0.27 0.07 0.45 0.33 0.25 0.07 0.43 0.33
IARIW-BOK Conference, Seoul South Korea, April 26-28 2017
Multidimensional Poverty by Immigrant Status - CCHS
2003 2005 2007 2009 2012
H NH H NH H NH H NH H NH
Native
Born 0.151 0.093 0.161 0.108 0.181 0.122 0.169 0.114 0.186 0.117
Immigrant
< 10 yrs 0.479 0.306 0.475 0.337 0.500 0.356 0.459 0.279 0.472 0.250
Immigrant
≥ 10 yrs 0.188 0.098 0.201 0.151 0.240 0.191 0.193 0.139 0.253 0.176
IARIW-BOK Conference, Seoul South Korea, April 26-28 2017
Conclusions….
Individual Indicators are not highly correlated
MDP measures are highly correlated
Surveys provide different levels for indicators and thus poverty
MDP higher head counts than income and expenditure (generally)
Income higher levels of poverty than expenditure
Generally uni and multidimensional trends not very similar
Ranking changes at provincial level
Subgroup analyses provide similar trends
GDP growth most inconsistent with the other measures
IARIW-BOK Conference, Seoul South Korea, April 26-28 2017
Conclusions….
???? Right measure???
Assumption seems to be MDP best captures experience but???
Policy –
No official poverty measure in Canada
Who decides which measure is best?
Who decides which indicators are important?
If poverty alleviation important goal need consistent measure
Then need consistent data
LFS legislated to provide consistent data over time for Urate etc.
Could we do the same for poverty measures?
IARIW-BOK Conference, Seoul South Korea, April 26-28 2017
IARIW-BOK Conference, Seoul South Korea, April 26-28 2017
Thank You
Comments Appreciated