Socio-Economic Determinants of Multidimensional Poverty in Rural West Bengal: A Household Level Analysis

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Socio-economic Determinants of Multidimensional Poverty in Rural West

Bengal: A Household Level Analysis
Article in Journal of quantitative economics: journal of the Indian Econometric Society · August 2018
DOI: 10.1007/s40953-018-0137-4
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Socio-economic Determinants of
Multidimensional Poverty in Rural West
Bengal: A Household Level Analysis
Poulomi Roy, Soma Ray & Sushil Kumar

Haldar
Journal of Quantitative Economics
ISSN 0971-1554
J. Quant. Econ.
DOI 10.1007/s40953-018-0137-4
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https://doi.org/10.1007/s40953-018-0137-4
ORIGINAL ARTICLE
Socio-economic Determinants of Multidimensional Poverty

in Rural West Bengal: A Household Level Analysis
Poulomi Roy1 · Soma Ray1 · Sushil Kumar Haldar1
© The Indian Econometric Society 2018
Abstract
The present study tries to estimate the incidence, depth and severity of multidimen-
sional poverty (MDP) along with the contributions of dimensions to MDP among
the rural households using multi-stage random sampling method in West Bengal. We
decompose the inequality of deprivation scores between and within different socio-
economic, religious and ethnic groups. The factors affecting the probability of falling
in multidimensional poverty is also explored here using logistic regression, and the
regression results suggest that public infrastructure plays an essential role towards
explaining the variations of MDP. The present study is expected to be helpful to the
development planners for better understanding of the root causes of MDP among the
rural households in West Bengal.
Keywords Multidimensional poverty · Inequality decomposition · FGT Index · Theil

Index
JEL Classification I30 · I32 · D63
Introduction
Resources and material deprivation are primary indicators of well-being. They are
useful predictors of other outcomes as well because needy individuals have far worse
prospects than the non-poor ones on a range of issues, from physical health to educa-
tional attainment and socio-emotional functioning (Duncan and Brookes-Gunn 1997;
B Poulomi Roy
poulomi.roy@gmail.com
Soma Ray
somaray35@gmail.com
Sushil Kumar Haldar
sushil.haldar@gmail.com
1 Department of Economics, Jadavpur University, Kolkata 700032, India
123
Sen 1997a, b). The concept of poverty is complex and multi-dimensional. The mul-
tidimensional view of the scarcity of resources has been emerging gradually about
and as a criticism of mainstream economic development that focused on growth in
gross national product (GNP) per capita. Growth, though a component of economic
progress, is insufficient as an objective since aggregate growth can go along with
wrenching deprivation among the poor, with political oppression or with any num-
ber of other less desirable states of affairs, at least in medium terms (Streeten 1994;
Ranis et al. 2000). Since the literature on poverty is vast and multifaceted, we will
concentrate on multidimensional poverty.
A poverty measure usually starts from the notion of fundamental human require-
ments such as health and nutrition as reflected in the works of Rowntree (1901).1
Poverty is a situation of a meager standard of living, in either absolute or relative term
to society. According to absolute poverty, a poor household (or an individual) fails
to meet a subsistence level of living whereas the relative poverty approach focuses
on the relatively deprived units of society.2 The concept of absolute poverty is more
relevant and applicable in the poor and developing economies while the notion of
relative poverty is more fit to the developed countries. According to Sen (1981), abso-
lute poverty refers to a state of deprivation and identifies hunger and malnutrition. He
argues that poor person’s food consumption often does not meet the minimum calorie
and nutritional requirements. This is also known as ‘biological approach’ of identify-
ing the nutritional elements of poverty, and this was not beyond criticism.3 The other
approach relating to the measurement of poverty is basic ‘Capability Failure’. The
inability of individuals or communities to choose some valuable ‘doings’ or ‘beings’,
which are basic to human life, is his/her ‘Capability Failure’.
An absolute poverty can be recognized even if one does not know the relative picture
(Sen 1985). In ‘Commodities and Capabilities’, Sen (1985) has argued that poverty
can be seen as an absolute inability to pursue certain valuable functioning. Depri-
vation in capabilities is the result of lack of opportunity-signifying that society has
not provided people with access to the means to develop or maintain essential human
capabilities. This enables us to build up a relationship between development and depri-
1 Rowntree (1901) defined poverty primarily as those families whose earnings are insufficient to meet the
minimum necessities for the maintenance of merely physical efficiency. In the life-cycle of an individual
poverty can be found by the sudden fluctuations in the income and employment of his father beside other
family members. He defined the poverty line using work efficiency of individuals that, in turn, is related to
biological requirements.
2 A family with income less than one half the median family income can be defined as relatively poor
(Fuchs 1967). Townsend (1974) has argued that relative poverty should incorporate objective conditions
with ‘feelings of deprivation’.
3 The biological approach was under attack due to difficulty in determining minimal nutritional require-
ments, which were varied internationally. Sukhatme (1981, Sukhatme and Paresh 1983) has argued that the
energy requirements of an individual are not fixed and it varies between individuals (due to inter-individual
genetic differences) and minimum calorie norms depends on age, sex, body weight, type of work, occu-
pation, etc. The income or expenditure method identifies the poor as those who lack the purchasing power
to meet a subsistence level of living. This technique entails the estimation of the poverty line, i.e., the
minimum income needed to meet the basic needs and persons with money income or expenditure below
this threshold line are regarded as poor (Rao 1977; Dandekar and Rath 1971; Bardhan et al. 1974; Deaton
1997). Since both spending and income are measured in money, the choice of the cut-off or poverty line is
always somewhat arbitrary (HDR 1996).
123
vation. Human development is defined by the expansion of capabilities, where human

beings are the means and ends in all development process. Unlike income, capabilities
are reflected not in inputs but in human outcomes—in the quality of people’s lives.
Deprivation is reflected in a lack of basic capabilities4 people failing to reach a certain
level of essential human achievement or functioning (UNDP HDR 1996). Sen (1983)
has argued that a better way of conceptualizing poverty is ‘Capability Failure.’
Poverty: A Multidimensional View
The Capability Poverty Measure is a simple index comprising of three indicators

that reflect the percentages of the population with capability shortfalls in three basic
dimensions of human development: living a healthy and well-nourished life, having
the capability of safe and healthy reproduction and being literate and knowledgeable
(Sen 1990; UNDP 1996). The three corresponding indicators are the percentage of
children under five who are underweight, the percentage of births not attended by the
professional health personnel and the percentage of women aged 15 years and above
who are illiterate (UNDP HDR 1996). The Capability poverty measure differs from
the human development index in that it focuses on peoples lack of capabilities rather
than on the average level of skills in a country. The human development index uses
income, but the capability poverty measure does not. Comparing results of the capa-
bility poverty measure with those of human development index would show that some
countries have done relatively better in raising average capabilities than in reducing
capability poverty and others have done relatively better in lowering capability poverty
than in raising average abilities (UNDP 1996). A composite index is made giving equal
weights in three variables as cited above. The composite index is the sum of these three
variables expressed as the percentages of the relevant population of a country that is
poor.5
The World Bank’s ‘Voices of the Poor’ studies (Narayan et al. 2000) and World
Bank (2002) have emphasized the goal of ‘poverty reduction’ or to an end of human
poverty from the countries in the world.
4 Capability refers to a person’s or groups’ freedom to promote valuable functioning. Or, in other words, the
capability is a set of values of functioning, reflecting the person’s freedom to lead the decent life (Sen 1992).
By the term ‘Freedom’, Sen (1999) has mentioned five kinds of ‘freedom’. These are political, economic
facilities, social opportunities, transparency guarantees and reproductive securities. Basic capabilities refer
to (a) leading a life free of avoidable morbidity (b) being informed and educated and (c) being well-nourished
(Sen 1997a, b). A basic capability is a capability to enjoy a functioning that is defined as a general level
and refers to a basic need (i.e., a capability to meet a basic need) or, in other words, a capability to avoid
malnourishment, a capability to be educated and so on (Alkire 2002).
5 The three variables in the capability poverty measure covers substantial ground—indication of nutrition
and health for the population as a whole (measured by underweight children), access to reproductive health
services and a concrete test of access to health services in general (measured by unattended trained health
personnel) and basic educational attainment plus information on gender inequality (measured by female
adult illiteracy). The index relating to capability poverty measure emphasizes critical areas where progress
is needed must remain especially in poor countries (HDR 1996). Therefore, capability poverty measure
P +P +P
(CPM) is defined as: CPM 1 32 3 , where P1 percentage of children under age six who are under-
weight, P2 percentage of births unattended by a trained health professional and P3 percentage of adult
women who are illiterate.
123
Sen and Anand (1997) have formulated a multidimensional deprivation index,

known as Human Poverty Index6 to measure capability deprivation in basic three
dimensions of human life-longevity, knowledge and a decent standard of living. The
first deprivation relates to survival—the vulnerability to death at a relatively early
age. The second relates to knowledge-being excluded from the world of reading and
communication. The third relates to a decent standard of living regarding overall eco-
nomic provisioning. Then, human poverty index (HPI) comprising three dimensions,
which was introduced, in the 8th Human Development Report-1997 in addition to
HDI and GDI (UNDP 1997). The human poverty index combines basic dimensions
of poverty and reveals interesting contrasts with income poverty—it is written as the
weighted mean of three different proportions. The human development index (HDI)
uses income, but the human poverty index (HPI) does not. The HDI measures aver-
age achievement based on range equalization or relative distance method whereas
the HPI measures deprivations in the three basic aspects of human development. The
HPI takes into account ‘Output’ (or attainment) and ‘Input’ (or process) indicators.7
The criterion used in constructing HPI differs between developed and developing
countries.8 In India, Planning Commission measures Human Poverty Index (HPI)
considering three dimensions—health, education and economic provisioning but the
indicators used in each aspect is not identical to the HPI used by UNDP (HDRC
2004).9 The HPI does follow some essential properties of a good index10 ; how-
ever, HPI does also suffer from the problem of the choice of the dimensions and
1
6 Human Poverty Index, P(α) w1 P1α +w2 P2α +w3 P3α α
w1 +w2 +w3 , where P1 is the percentage of people who
P +P +P
do not survive after age 40, P2 percentage of adults who are illiterate and P3 31 332 33 , P3 is
a composite variables in which P31 people without access to safe water (in percentage), P32 people
without access to health services (in percentage) and P33 moderately and severely underweight children
under five (in percentage); here, α is the order of the average (?).
7 In the context of development and deprivation perspective, Kamdar and Basak (2005) has made a distinc-
tion between the output (and attainment) and input (or process) indicator. Output or attainment indicators
reflect the status of the population in that particular dimension of development; for example, life expectancy
is an outcome indicator of the health status of the population indicating the number of years a person is
expected to survive at age one or birth. Access to health services is an input indicator or a process indicator
as it contributes to higher life expectancy.
8 The human poverty index for OECD countries (HDR 1998) measures deprivations in the same dimensions
as the HPI for the developing countries and also captures social exclusion. Thus it reflects deprivations in
four dimensions: (a) A long and healthy life—vulnerability to death at a relatively early age. The probability
at birth of not staying alive to age 60 measures this. (b) Knowledge—exclusion from the world of reading
and communications, as measured by the percentages of adults (aged 16–65) lacking functional literacy
skills. (c) A decent standard of living—as measured by the percentage of people living below the income
poverty line (50% of the median disposable household income). (d) Social exclusion—as measured by the
rate of long-term unemployment (12 months or more).
9 The health indicator is a percentage of people not expected to survive beyond age 40 (P ). The second
1
index (P2 ) is comprised of two variables: illiteracy rate for the population in the age group 7 years and
above and proportion of children in the age group 6–18 years not enrolled in the schools. The economic
deprivation indicator (P3 ) is a composite of four parameters: percentage of people below poverty line (P31 );
proportion of children in the age group 12–23 months not fully vaccinated (P32 ); proportion of people living
in kutchha houses (P33 ); and proportion of people have not been able to get access to safe drinking water,
electricity and health facility (P34 ).
10 Human Poverty Index, P(α) does satisfy some essential properties like homogeneity, substitutability,
convexity but not decomposability; generally, P(α) cannot be considered as a head-count ratio (HCR).
123
the corresponding indicators, equal weights to each dimension, aggregation, over-

lapping and multicollinearity (Alkire 2007; Krishnaji 1997; Rippin 2009; Roy and
Haldar 2010). In 2010, a new international measure of poverty developed by Alkire
and Foster (2009) and Alkire and Santosh (2010)—the Multidimensional Poverty
Index (MPI)—which directly measures the combination of deprivations that each
household experiences. The new MPI supplants the HPI used in previous Human
Development Reports. Unlike HPI, one can estimate the new measure of poverty viz.
MPI efficiently using household level data. The MPI has three dimensions compris-
ing of ten indicators. Three dimensions of MPI are health, education, and standard
of living and weight assigned to each aspect is 1/3. Two signs such as malnourish-
ment (anthropometry measurement) and death of child cover the health aspect of
poverty. Education dimension is captured by years of schooling and school atten-
dance. Six indicators such as electricity, water, sanitation, cooking fuel, flooring of
the room and owning durable assets (like TV, telephone, motor, refrigerator) are used
to measure standard of living aspect. Each index within a dimension is also equally
weighted.
The MPI assesses the nature and intensity of poverty at the household level. The
poor people are multiply deprived, and the extent of their deprivation scores measure
the length of their deprivations in three basic dimensions of life. The MPI creates a
clear picture of people living in poverty within and across countries, regions and the
world; the MPI complements income poverty (Alkire and Foster 2010).
Where does India Stand Globally in Respect of Money Metric Poverty,

Multidimensional Poverty Index and Global Hunger Index (GHI)?
According to the revised World Bank methodology (setting poverty line at $1.78 per
day on 2011 PPP), India had 179.6 million people below the poverty line, whereas
137.6 million in China, and 872.3 million in the world had people below the poverty
line on an equivalent basis in 2013. India, having 17.5% of total world’s population,
had 20.6% share of world’s poor (Chandy and Kharas 2014). In 2017, for seven
South Asian countries, and subnational data for 84 regions, OPHI released poverty
estimations.It covered 94% of South Asia’s population.
India accounts for both the maximum and a staggering amount of multidimension-
ally poor people. The number of poor people living in India exceeds the number of
people living below poverty line in total sub-Saharan Africa.
1.6 billion people in the world found to be multi-dimensionally poor. Out of them,
nearly 440 million people live in eight large Indian states (Bihar, Jharkhand, Mad-
hya Pradesh, Uttar Pradesh, Chattisgarh, Odisha, Rajasthan and West Bengal). The
eight Indian states have a similar number of poor as in 25 African countries. The
most impoverished region in South Asia is Bihar (OPHI 2017). The global hunger
Footnote 10 continued
Following the endnote 6, if we assume P1 P2 P3 P and α 1, then and only then P(α) can be
considered as HCR, but in reality, it is rarely happened (UNDP 1997).
123
index11 (GHI) is a multidimensional statistical tool used to describe the state of coun-
tries’ hunger situation. It is released annually by International Food Policy Research
Institute (IFPRI) since 2006. India has been ranked low, 97th among the 118 countries
surveyed in 2016 on Global Hunger Index (GHI); India has scored low 28.5 on a 0–100
point scale of the index. It describes India’s hunger situation as “serious” (IFRI 2016).
Importance and Objective of the Study
Using NSSO data, numerous studies support the view that households belong-
ing to lower social strata do suffer to a large extent from money-metric (viz.
income/consumption) poverty.12 We calculate incidence, depth, severity and identify
the determinants of multidimensional poverty (MPI) among different socio-ethnic and
religious groups in India by taking data from the state of West Bengal in particular.
The pro-poor left-front government had ruled for 30 years in West Bengal. There-
fore, we expect that West Bengal will perform better in reducing poverty compared
to the other Indian States; despite the conducive political environment, the incidence
of poverty is found to be high as it was revealed by OPHI (2017). High incidence of
poverty compels us to carry out this survey in rural West Bengal. Our survey design
captures both geographic as well as socio-ethnic diversity. Decomposition of MPI by
different categories helps us in identifying the most vulnerable groups and also the
aspect of deprivation. Our paper thus identifies the target groups and the areas in which
priority is to be given to alleviate mass human deprivation for the policymakers and
the development planners. Following are the objectives of our study:
Firstly, we want to estimate the incidence, depth, and severity of multidimensional
deprivation scores among different socio-ethnic and religious groups in rural West
Bengal. The second objective is to find out the contributions of each dimension in
multidimensional poverty index (MPI). The third is to explore the variations of MPI
within and between different social groups. We also attempt to analyze the inequal-
ity of multidimensional deprivation scores among different socio-ethnic and religious
groups using entropy measure of inequality since it is perfectly decomposable.13 The
11 The Global Hunger Index (GHI) developed by International Food Policy Research Institute (IFRI) is
a multidimensional statistical tool used to describe the starvation condition of different countries. It is
released annually by IFPRI since 2006. The GHI is calculated by taking into account four indicators;
these are (1) undernourished population (1/3rd weight), (2) child wasting (1/6th weight), (3) child stunting
(1/6th weight) and (4) infant mortality rate (1/3rd weight). Stunting is defined as the deficiency in height
about age reflecting chronic undernutrition; wasting means low weight about child’s height reflecting acute
malnutrition.
12 A broad discussion of poverty in India among different socio-ethnic and religious groups can be found
in Meenakshi et al. (2000), Panagariya (2008), Panagariya and Mukim (2013), Thorat (2006) and Thorat
and Deubey (2012).
13 The generalized entropy (GE) class of measure of inequality has some advantages over gini-coefficient;
GE measure is sub-group decomposable, and it is distribution sensitive, and one can quickly reconcile
between GE measure of inequality with Atkinson measure. Theil Index belongs to GE(α) measures of
inequality for if α 1. Therefore, following Cowell and Jenkins (1995) and Litchfield (1999), we can write
the Theil Index [GE(1)] in m-group decomposable form as:
m

m
n k ȳk n k ȳk ȳk
Theil Index G E(1) T Tk + ln .
n ȳ n ȳ ȳ
k1 k1
123
fourth and last objective is to determine the factors explaining the variations of mul-
tidimensional deprivation scores among the rural households.
Data, Sample Design and Econometric Model
Data relating to households level characteristics are collected using multi-stage random
sampling method. At first stage, we divide 23 districts of West Bengal into three distinct
geographical zones based on agro-climatic conditions; these are Northern, Western
and Southern. There are seven districts in the Northern Zone; five districts belong to
Western and rest belong to Southern Zone. Due to time and monetary constraints, we
did not consider the Western Zone. In the 2nd stage, we select two districts randomly
from Northern and Southern Zones.
In the 3rd step, we randomly choose one district and one block from each elected
district. In the 4th stage, we purposively select two Gram Panchayats (administrative
village units)-one is the most developed and the other is the least developed based on
female literacy rate for the year 2011 Census, Government of India. In the 5th stage, we
employ systematic sampling in choosing three villages (from each Gram Panchayat)
ensuring sufficient distance from one village to another. At the final step, we randomly
select 16 households having at least one living child from each chosen village. Thus,
from one district, we have selected 96 (i.e., 2 × 3 × 16) households. Since we have
four districts, the total sample size is 4 × 96 384.
We collect information on various socio-economic and demographic characteris-
tics of the respondents; distance from the residence of the households to the nearest
marketplace, school, hospital, pucca road, banks, etc. to examine their impact on mul-
tidimensional poverty (MPI). Considering household as the unit of analysis s short
description of Alkire–Foster method is given below.
Following Alkire and Foster (2009) methodology, we consider 100 as total depriva-
tion weights divided equally into three dimensions like health, education, and standard
of living. In health and educational deprivations there are two indicators each, but in
case of a standard of living deprivations measurement, there are six indicators as
shown in Table 1 above. We assign equal weights to each index of the sub-dimensions
of deprivations.
We assign value ‘1’ for deprivation in each indicator and ‘0’ otherwise. The maxi-
mum total deprivation score (d) will be 100.
According to UNDP, a household (or all members of the household) is said to
be multi-dimensionally poor if the sum of weighted deprivation score (WDS) for a
household is 33.33% or more (Alkire and Foster 2009; Alkire and Santos 2010; UNDP
2015).
The multi-dimensionally poverty headcount ratio (H) is the proportion of the multi-
dimensionally poor people to the total population. Therefore,
The within-group inequality and between-group inequality are captured by the first and second term of
the above formula. Here m stands for a number of groups, nk be the population size of the kth group, n be
the total population, ȳk means mean income (in our case, it is deprivation score) of the kth group, ȳ be the
mean of the overall population. Theil Index [viz. GE(1)] of the kth group is represented by T k .
123
Table 1 Dimensions, indicators, and weights of the multidimensional poverty (MPI)
Dimension Indicators Weight

(weight)
Health (33.33) (1) As a minimum, one member of the 16.65

family suffers from malnutrition
(2) One or more child have died during last 16.65
five years in a family
Education (33.33) (1) Zero members have completed five years 16.65
of schooling in a family
(2) At least one school-aged child not 16.65
enrolled in school in a family
Standard of living (1) No electricity connection in the 5.55
condition household
(33.33)
(2) No access to safe drinking water in the 5.55
household
(3) No access to improved sanitation in the 5.55
household
(4) House has dirt wall/floor in the family 5.55
(5) Household uses dirty cooking fuel (dung, 5.55
firewood or charcoal)
(6) Household has no car and does not own 5.55
at least one of the items like bicycle,
motorcycle, radio, refrigerator, telephone
or television
Total weight Total weight 100
100
H q/n HCR, (1)
where q stands for the number of multi-dimensionally poor people and n is the total
population. It measures the incidence of poverty. The intensity of multi-dimensional
poverty (A) reflects the proportion of the weighted component indicators, in which,
on average, poor people are deprived. Technically,

q
A ci /q Sum of the deprivation score of the poor/total poor, (2)
i
where the sum of c denotes the total score of weighted deprivations, the poor people
do experience. The deprivation score c of a poor person can be expressed as the sum
of deprivations in each dimension j (j 1, 2, 3), thus, c c1 + c2 + c3 .
Finally, the multi-dimensional poverty index is the product of the multi-
dimensionally poverty headcount ratio (H) and the intensity of multi-dimensional
poverty (A). Therefore,
M P I H × A. (3)
123
The contribution of dimension j (j 1, 2 and 3) to multidimensional poverty (MPI)

can be expressed as:

q
cj
1
n
Contribution j . (4)
MPI
A generalized measure of poverty developed by Foster (1984) is to be used here to
find out the incidence, depth, and severity of multidimensional poverty:

(x ∗ − xi )α
xi <x ∗
F GT (α) , (5)
n(x ∗ )α
here x* be the cut-off level of income used for determining money-metric poverty, x i
stands for income earned by the ith poor, n be the total number of persons and α be
the sensitivity parameter—if α 0, we can get the “incidence” of poverty, thus
n∗
F GT (0) H C R . (6)
n
if α 1, we obtain the second measure of poverty, viz., the poverty gap index (PGI)
which indicates the “depth” of poverty:
n ∗ (x ∗ − x̄ p )
F GT (1) P G I H C R.R, (7)
nx ∗
where n* and x̄ p are the size and mean income of the poor population, respectively,
x ∗ −x̄
and R is the poverty gap ratio, x ∗ p . When α 2, we get the poverty measure that
reflects the “severity” of poverty and is given by:
F GT (2) H C R[R 2 + (1 − R)2 C V P 2 ]. (8)
Here CVP is the coefficient of variation of income of the poor people. It can be
proved that if α tends to infinity, then FGT will capture only one person who is the
poorest of the poor.14
14 FGT(α) can be expressed as:

(x ∗ −xi )α
1 x ∗ −xi α 1 gi α
n∗
x∗>xi
F GT (α) , (9)
n(x∗)α n x∗>x x∗ n x∗
i i1
here n* be the number of poor people, x* be the threshold level of income used to determine poverty
gi x ∗ − xi , and xi is the income of the ith poor. Equation (A1) can be expressed as:
1 gi α 1 α
n∗ n∗
F GT (α) ∗ Ki , (10)
n x n
i1 i1
g
here, K i x ∗i
123
To apply FGT Index in measuring multidimensional poverty,

we need to transform
the numerator; instead of xi <x∗ (x ∗ − xi )α , it will be: xi >x∗ (xi − x ∗ )α since the
deprivation score is set at 33.3 x*, a person/household is said to be poor if the
deprivation score exceeds 33.3.
If the household’s scores on multidimensional deprivation lie between 0 and 33.33,
then the household will not be treated as multidimensionally poor. Thus, the deprivation
scores for poor households vary from 33.33 to 100. Now, we can find the depth and
severity of deprivation among different social groups by applying the FGT Index for
α 1 and 2, respectively. Now, to find out the determinants of multidimensionally poor
among different socio-ethnic groups, the following logit regression is to be applied:

Pi
Logit ln
1 − Pi
β1 + β2 M E i + β3 D N Z i + β4 SCi + β5 STi + β6 AG L i
+ β7 N AG L i + β8 F S I Z E i + β9 S H G i + β10 N T N Di + β11 A Ri
+ β12 F AMi + β13 M K Di + β14 P H Ci + β15 D P Si + u i . (14)

Pi
Dependent variable, Logit ln 1−P i
where Pi E[Yi 1(DS ≥ 33.33)|X i ],
DS stands for deprivation score, we define a household is multidimensionally poor
if the deprivation score (DS) ≥ 33.33; here I stand for a household. The explanatory
variables are defined as follows:
ME monthly expenditure per capita; DNZ Dummy for North Zone, if a house-
hold belongs to north zone, its value is 1, 0 otherwise; DSC 1 if a household belongs
to SC community, 0 otherwise; DST 1, if a household belongs to ST Dummy, 0 oth-
erwise. (reference category OBC and General); AGL 1 if the primary occupation
of the household is agricultural labour, 0 otherwise; NAGL 1, if the occupation of
the household is non-agricultural labour, 0 otherwise, (reference category is Cultiva-
tor); FSIZE Family Size; SHG 1 if any female member of the family is attached to
Self Help Group, 0 otherwise; NTND Number of times affected by natural disaster
like flood/storm that destroyed household property and livelihood; AR 1 if approach
If incomes of the poor are arranged as x1 < x2 < . . . xn∗−1 < xn∗ , therefore, FGT(α)1 is defined as:
1 g1 α 1
F GT (α)1 K 1α , (11)
n x∗ n
1 Kα K 1α
F GT (α)1
thus: nn∗ 1 α α + ... Kα , (12)
F GT (α) K + K
1
n K iα 1 2 n∗
i1

F GT (α)1 K2 α K3 α K n∗ α −1
Equation (14) can be simplified as: 1+ + + ... . (13)
F GT (α) K1 K1 K1
F GT (α)
Expanding (14) and taking the limit α → ∞ F GT (α)1 1, this proves that FGT(α)1 FGT(α). Here,
FGT(α)1 stands for the poorest of the poor.
123
road of a household is kutchha (mud built), 0 otherwise; FAM mean age at marriage
of the females in a family; MKD distance from residence to the nearest marketplace;
PHC distance from residence to nearest Govt. Health Centre (like SC/PHC/CHC);
DPS distance from residence to primary school.
Here, taking household as the unit of analysis; the parameters of the logit are
to be estimated by maximum likelihood methods (MLE) since OLS is inapplicable
in logistic regression (Greene 2000). We also address the problem of endogeneity
between Yi and multidimensional deprivation score here.
Empirical Findings
In Appendix we report the descriptive statistics about main variables of our study in
each of eight Gram Panchayat from four districts (viz. Blocks). Keeping in mind the
objectives of our research, firstly, we want to estimate the MPI and the contribution
of education, health and living standards of MPI across different Gram Panchayats in
each of four districts (viz. Blocks). We present the results in Table 2 below.
The Multidimensional Poverty (MPI) varies to a large extent among the rural house-
holds, MPI is maximum in Malangi GP of Alipurduar, followed by Kalinagar GP of
North 24 Parganas and lowest in Ramnganga GP of south 24 Parganas. The incidence,
depth, and severity of deprivation score are found to be maximum in Malangi GP (in
Alipurdua district) followed by Gitaldaha-2 (Cooch Behar district) and least in Ram-
ganga GP (in South 24 Parganas). Gram Panchayats (GPs) belonging to North Bengal
manifest higher incidence of MPI compared to South. The contributions of education,
health, and standard of living in MPI across the GPs give exciting results that can
be helpful towards formulating development strategy; health varies to a great extent
followed by education while least variance is noticed in respect of living standard.
Decomposition of inequality of deprivation scores in various socio-economic
aspects (as outlined in Table 3) reveals that within-group disparity is more robust
compared to between except district/Blocks. The above table (viz. Table 3) does not
provide us inequality within each stratum of Socio-Economic Groups. For example,
the social group consists of SC, ST, OBC and general (G); the disparity within each
category of social groups is missing in Table 3. Thus, population-weighted inequality
of deprivation scores of different sub-groups (or strata) in respect of religion, occu-
pation, districts (viz. Blocks), region (North vs. South) and Gram Panchayat, etc. are
estimated, and the results are reported in Table 4.
Disaggregated results about inequality of deprivation score reveal exciting findings.
The difference of deprivation score increases with social hierarchy; it is found to be
maximum among the general caste (viz. higher Caste in society) followed by OBC,
the least deprivation score among the ST community. Inequality of deprivation score
does not vary too much among different religious groups; variation is more or less
same between Hindu and Muslim. Inequality varies among different occupations; it is
higher among the cultivators. The disparity of deprivation score does also vary across
Districts/Blocks, but it remains more or same between zones/regions. We have eight
GPs scattered around four Districts/Blocks manifesting a wide range of inequality in
deprivation scores. The disparity in deprivation score is found to be the maximum in
123
123
Table 2 MPI, contributions of MPI, multidimensional deprivation score with incidence, depth and severity across districts (viz. block) and gram panchayats (viz. administrative
village unit)
District (block) Gram panchayat MPI Contribution of Incidence FGT Depth FGT (1) Severity FGT (2)
(GP) (0)
Education Health Living std.
Alipurduar Latabari 24.73 0.287 0.400 0.311 0.520 0.173 0.105

(Kalchini)
Malangi 32.17 0.347 0.347 0.304 0.604 0.324 0.291
Cooch Behar Dinhata village-2 12.58 0.349 0.260 0.390 0.354 0.102 0.061
(Dinhata-2?)
Gitaldaha 2 22.97 0.241 0.372 0.386 0.562 0.184 0.120
North 24 Parganas Kalinagar 24.37 0.342 0.217 0.440 0.520 0.169 0.107
(Block?)
Seheraradhanagar 17.51 0.408 0.201 0.389 0.375 0.109 0.084
South 24 Parganas Ramganga 7.66 0.238 0.273 0.487 0.229 0.014 0.006
(Block?)
Dakshin 14.12 0.317 0.241 0.441 0.395 0.054 0.022
Gangadharpur
Source: Authors estimation from household survey
Table 3 Decomposition of inequality of multidimensional deprivation score among different socio-economic

groups
Socio-economic groups Within groups Between groups
Social class 0.126521 0.018329

Religion 0.142577 0.002814
Occupation 0.143983 0.000877
District (viz. Block) 0.126417 0.145029
Region (North vs. South) 0.138930 0.006334
Gram panchayat 0.120291 0.024273
Note: The value of inequality using Theil Index [GE (1)] is estimated at 0.145. Source: Authors estimation
from household survey
Dinhata-2 (Cooch Behar District) followed by Ramganga (N 24 Parganas); the least

in Latabari (Alipurduar District).
To explore the determinants of multidimensional poverty among the rural house-
holds, we employ the logistic regression as outlined in the methodology section. Table 5
below reports the logistic regression results.
The estimated logistic regression as reported in Table 5 suggests that only seven out
of thirteen variables appear to be significant but with different levels. Variables like
Scheduled Caste dummy (DSC), approach road (AR) and distance of the public health
center from residence (PHC) appear to be significant at one percent level. Again, caste
dummy like Tribal Community (DST), distance from residence to nearest marketplace
(MKD) come out to be significant at five percent level. Regional dummy (DNZ) and
family Size (FSIZE) emerge significantly at ten percent level. The estimated slope
coefficients suggest that for a unit increase in NZ (viz. from value 0 to 1), the log of
odds in favour of MPI goes up by 0.77 units (odds ratio exceeds 1). More appealing
interpretation can be made if we consider the marginal effect as shown in the 4th column
of Table 5. The marginal effect of categorical variables (viz. NZ), therefore, shows
how P(Y 1, which corresponds to DS > 33.3) changes as the categorical variable,
like NZ changes from 0 to 1, holding all other variables at their means. That is, for a
categorical variable (NZ), the Marginal Effect Pr(Y 1|X, NZ 1) − Pr(Y 1|X,
NZ 0 0) 0.129. In the same way, the probability of falling in MPI increases by
10 and 11%, respectively in case of a unit increase in SC and ST dummy concerning
general category. One unit increase in family size reduces the chance in falling MPI by
2%. The most significant and powerful dummy variable in our logit model is approach
road (AR), incremental change in approach road raises the probability of falling in
MPI by 18 percent, the reference category of AR is pucca/cemented road. One unit
(viz. 1 km) increase in distance from residence to market and primary health center
elevate the probability of falling in MPI by 1 and 5%, respectively.
Concluding Observations and Policy Options
Most of the poverty studies based on income (or consumption criterion) in India have
come up to support the view that the households belonging to lower social strata
123
Table 4 Population-weighted inequality of multidimensional deprivation score of different strata of socio-

economic groups
Socio-economic groups Theil Index Population share
Social class
Scheduled caste (SC) 0.119669 0.339521
Scheduled tribe (ST) 0.098614 0.232934
Other backward class (OBC) 0.124734 0.099401
General (G) 0.170059 0.328144
Religion
Hinduism (H) 0.149891 0.732335
Muslim (M) 0.146470 0.137126
Others 0.105622 0.130539
Occupation
Agricultural labourer (AGL) 0.140489 0.619162
Cultivator (CL) 0.179039 0.211976
Others 0.117482 0.168862
Districts/blocks
Alipurduar 0.113439 0.232934
Coochbehar 0.140708 0.245509
North 24 Parganas 0.110038 0.246108
South 24 Parganas 0.149472 0.275449
Region/zone
North 0.134451 0.478443
South 0.144013 0.521557
Gram panchayat (Administrative
Village Unit)
Malangi (GP belongs to Alipurduar) 0.124313 0.116168
Latabari (GP belongs to Alipurduar) 0.094188 0.116766
Gitaldaha-2 (GP belongs to Cooch Behar) 0.103329 0.119760
Dinhata-2 (GP belongs to Cooch Behar) 0.162855 0.125749
Kalinagar (GP belongs to South 24 Prg.) 0.111980 0.123952
Seheraradhanagar (GP belongs to South 24 Prg.) 0.105891 0.122156
Ramganga (GP belongs to North 24 Prg.) 0.155264 0.148503
Dakshin Gangadharpur (GP belongs to North 24 Prg.) 0.124013 0.126946
Source: Authors estimation. Note: Theil Index [viz. GE(1)] by groups
manifest higher incidence of poverty. Our findings also prop up the same if poverty is
measured from multidimensional perspectives.
The empirical results show that the MPI score varies with the geographical region;
the MPI is observed to be the maximum in Alipurduar (of North Zone) and the mini-
mum in South 24 Parganas (of South Zone). The contribution of different dimensions
of multidimensional poverty varies to a large extent across GPs. The incidence, depth,
and severity of deprivation score are found to be higher in North Zone compared to
South Zone.
123
Table 5 Results of logistic regression
Logistic regression (2SLS/IV method) number of observations 384

Wald chi2 (15) 43.74, Prob > chi2 0.0001
Log pseudo likelihood − 236.88, Pseudo R2 0.1071

Pi
The dependent variable is defined as logit: Logit ln 1−P , where,
i
Pi E(Yi 1(DS ≥ 33.33)|X i )
The mean predicted probability 0.7892

Explanatory variable Coefficient Odds ratio Marginal effect ∂∂XP
i
ME − 0.00019 (0.00011) 0.999 − 0.000031

DNZ 0.778* (0.469) 2.17* 0.1293*
DSC 0.651*** (0.265) 1.913*** 0.1082***
DST 0.670** (0.321) 1.95** 0.111**
AGL − 0.054 (0.276) 0.947 − 0.0089
NAGL 0.161 (0.384) 1.174 0.026
FSIZE − 0.132* (0.079) 0.876* − 0.0219*
SHG 0.358 (0.296) 1.428 0.059
NTND 0.100 (0.099) 1.104 0.016
AR 1.093*** (0.473) 2.973*** 0.181***
FAM 0.048 (0.048) 1.049 0.0079
MKD 0.089** (0.045) 1.092** 0.0148**
PHC 0.335*** (0.146) 1.396*** 0.059***
DPS 0.131 (0.231) 1.139 0.021
Constant − 0.942 (1.441) 0.390 − 0.1566
Note: Values in parentheses represent SE (Robust); *, ** and *** imply 10, 5 and 1% level of significance.
Monthly expenditure per capita (Yi ) of the household is endogenously determined causing the problem
of simultaneity. This is why we have employed 2SLS (IV) method. Instrumented variables are FSIZE,
occupation, educational attainment, land holding etc. Source: Authors estimation from primary survey
ME monthly expenditure per capita; DNZ Dummy for North Zone, if a household belongs to north
zone, its value is 1, 0 otherwise; DSC 1 if a household belongs to SC community, 0 otherwise; DST 1,
if a household belongs to ST Dummy, 0 otherwise. (reference category OBC and general); AGL 1 if the
primary occupation of the household is agricultural labour, 0 otherwise; NAGL 1, if the occupation of the
household is non-agricultural labour, 0 otherwise, (reference category is cultivator); FSIZE family size;
SHG 1 if any female member of the family is attached to Self Help Group, 0 otherwise; NTND number
of times affected by natural disaster like flood/storm that destroyed household property and livelihood;
AR 1 if approach road of a household is kutchha (mud built), 0 otherwise; FAM mean age at marriage
of the females in a family; MKD distance from residence to the nearest marketplace; PHC distance from
residence to nearest Govt. Health Centre (like SC/PHC/CHC); DPS distance from residence to primary
school
Decomposition of inequality over socio-ethnic, religious, occupational and geo-

graphical regions reveals some interesting findings. Inequality in deprivation score is
found to be higher in upper social class (General Caste) compared to backward social
classes (like OBC, SC, and ST). The inequality of deprivation score is more or less
123
invariant over religious and district/block groups. The occupational group shows a
variation of disparity in deprivation score.
Keeping in mind the problem of endogeneity between expenditure and MPI, we
have tried to explore the determinants of MPI applying logistic regression. We find that
the risk of being multidimensionally poor is significantly higher among the households
having no pucca road. Due to lack of proper approach road, sometimes rural health
workers are found to be reluctant to provide services to those households living in
remote and inaccessible areas; the problem aggravates during the rainy season. House-
holds living in rural, remote areas without having any access to pucca (or motorable
road) do not find any motivation to send their children to school; they face problems
when they need emergency healthcare services. Similarly, the increase in distance
between residence to (1) nearest government health center and (2) the most adjacent
marketplace also augments the probability of being multidimensionally poor signif-
icantly. Our empirical findings suggest that socially backward classes like SC and
ST are more vulnerable and are at higher risk of falling in multidimensionally poor
compared to General caste. Geographical location dummy is revealed to be significant
at 10% level.
The policy prescriptions that come out of this study are that more egalitarian public
infrastructures like government health centers and access to the pucca road in all areas
especially in the areas of higher concentration of socially backward classes like SC and
ST are required to reduce multidimensional poverty. The analysis here fulfills a gap
in the literature on MPI measurement and its determinants among rural households in
West Bengal, India; but the present study covers only a small part of West Bengal. A
further research covering different parts of West Bengal will throw more information
on the multidimensional aspects of poverty.
The present study is expected to be helpful to the development planners in the better
understanding of the causes of multidimensional poverty among the rural households
in West Bengal.
Acknowledgements We are thankful to the Centre for Advanced Studies, Department of Economics,
Jadavpur University for Funding the Project entitled ‘Incidence, Depth, Severity and Determinants of
Multidimensional Poverty among Different Socio-Ethnic Groups: A Case Study of Selected Districts of
Rural West Bengal’.
Appendix
See Table 6.
123
Table 6 Summary table of key variables explaining multidimensional deprivation score
District Summary BMI Family size Monthly Distance of Minimum Distance Deprivation Age at
statistics expenditure between distance of between score marriage
primary school health centre market place
to residence to residence
North Bengal Mean 19.56 4.12 4232.29 2.35 3.13 4.67 0.35 17.9
Alipurduar SD 2.48 1.56 1255.09 0.56 1.05 2.02 0.18 3.19
CV 0.12 0.37 0.29 0.23 0.33 0.43 0.51 0.17
Skewness 0.59 0.20 0.59 0.55 − 0.02 0.06 0.30 0.13

Kurtosis 2.27 1.99 2.63 2.97 3.0 2.08 2.67 2.1
Median 18.74 4.0 4000.0 2.3 3.15 4.6 0.33 17.0
Cooch Behar Mean 20.66 4.27 5462.5 1.23 2.14 3.03 0.30 17.29
SD 2.32 1.43 1298.0 0.42 1.02 1.70 0.15 2.43
CV 0.11 0.33 0.23 0.34 0.47 0.56 0.51 0.14
Skewness 0.19 1.02 0.06 0.09 1.32 0.23 0.41 0.23
Kurtosis 1.46 4.70 2.24 2.06 3.90 1.94 2.73 2.92
Median 20.34 4.0 5500.0 1.2 1.8 3.00 0.27 17.0
South Bengal Mean 21.08 4.3 5027.08 1.70 1.71 2.17 0.30 17.7
North 24 SD 2.14 1.09 1985.76 0.37 0.43 1.75 0.14 1.97

Parganas
CV 0.10 0.25 0.39 0.21 0.25 0.80 0.48 0.11
Skewness − 0.15 0.43 2.78 − 0.24 0.30 1.61 0.74 0.54
Kurtosis 1.57 2.95 16.18 2.29 2.42 4.69 3.22 2.9
Median 21.55 4.0 4500.0 1.80 1.7 1.5 0.27 17.5
South 24 Mean 21.4676 4.8854 5219.7920 1.1010 1.5510 2.1792 0.2209 17.5313
Parganas
SD 2.08 1.38 1557.57 0.41 0.43 1.33 0.12 1.98
123
Table 6 continued
District Summary BMI Family size Monthly Distance of Minimum Distance Deprivation Age at
statistics expenditure between distance of between score marriage
123
primary school health centre market place
to residence to residence
CV 0.09 0.28 0.29 0.37 0.28 0.61 0.55 0.11

Skewness − 0.27 0.78 4.62 0.17 1.03 1.51 0.34 0.39
Kurtosis 2.10 4.02 35.25 2.14 3.51 11.07 2.44 2.93
Median 21.9 5.0 5000.0 1.05 1.5 2.2 0.16 17.5
Overall data Mean 20.69 4.39 4985.41 1.59 2.13 3.01 0.29 17.61n
SD 2.36 1.40 1613.04 0.66 1.0 1.94 0.16 2.44
CV 0.11 0.32 0.32 0.41 0.47 0.66 0.54 0.13
Skewness 0.01 0.56 2.43 0.57 1.22 0.80 0.59 0.31
Kurtosis 1.73 3.57 18.10 3.34 3.96 2.97 3.09 2.89
Median 20.77 4.0 4950.0 1.5 1.8 2.5 0.27 17.0
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Socio-economic Determinants of Multidimensional Poverty in Rural West

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Journal of Quantitative Economics

Socio-economic Determinants of Multidimensional Poverty

Poulomi Roy1 · Soma Ray1 · Sushil Kumar Haldar1

© The Indian Econometric Society 2018

Keywords Multidimensional poverty · Inequality decomposition · FGT Index · Theil

JEL Classification I30 · I32 · D63

1 Department of Economics, Jadavpur University, Kolkata 700032, India

vation. Human development is defined by the expansion of capabilities, where human

Poverty: A Multidimensional View

The Capability Poverty Measure is a simple index comprising of three indicators

Sen and Anand (1997) have formulated a multidimensional deprivation index,

the corresponding indicators, equal weights to each dimension, aggregation, over-

Where does India Stand Globally in Respect of Money Metric Poverty,

Importance and Objective of the Study

Data, Sample Design and Econometric Model

Table 1 Dimensions, indicators, and weights of the multidimensional poverty (MPI)

Dimension Indicators Weight

Health (33.33) (1) As a minimum, one member of the 16.65

H q/n HCR, (1)

The contribution of dimension j (j 1, 2 and 3) to multidimensional poverty (MPI)

F GT (2) H C R[R 2 + (1 − R)2 C V P 2 ]. (8)

14 FGT(α) can be expressed as:

To apply FGT Index in  measuring multidimensional poverty,

Alipurduar Latabari 24.73 0.287 0.400 0.311 0.520 0.173 0.105

Table 3 Decomposition of inequality of multidimensional deprivation score among different socio-economic

Socio-economic groups Within groups Between groups

Social class 0.126521 0.018329

Dinhata-2 (Cooch Behar District) followed by Ramganga (N 24 Parganas); the least

Concluding Observations and Policy Options

Table 4 Population-weighted inequality of multidimensional deprivation score of different strata of socio-

Socio-economic groups Theil Index Population share

Table 5 Results of logistic regression

Logistic regression (2SLS/IV method) number of observations 384

ME − 0.00019 (0.00011) 0.999 − 0.000031

Decomposition of inequality over socio-ethnic, religious, occupational and geo-

Skewness 0.59 0.20 0.59 0.55 − 0.02 0.06 0.30 0.13

North 24 SD 2.14 1.09 1985.76 0.37 0.43 1.75 0.14 1.97

CV 0.09 0.28 0.29 0.37 0.28 0.61 0.55 0.11

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