In the recent literature, consensus has emerged that poverty
is a multidimensional phenomenon; see Alkire and Santos (2010) for a
review of the major arguments. Nonetheless, the most widely used
measures of poverty remain unidimensional, being based on income or
caloric intake cutoffs. The logic for the use of income based measures
was that it was only lack of income which led to deprivation—with
sufficient income; rational agents would automatically eliminate
deprivations in all dimensions in the right sequence of priorities.
However, careful studies like Thorbecke (2005) and Banerjee and Duflo
(2006) show that this does not happen. Even while malnourished and
underfed, the poor spend significant portions of their budgets on
festivals, weddings, alcohol, tobacco and other non-essential items. The
move from abstract theoretical speculation based on mathematical models
of human behaviour to experiments and observations of actual behaviour
has led to dramatic changes in the understanding of poverty and how to
alleviate it. Some of these insights are encapsulated in a new approach
to poverty advocated by Banerjee and Duflo (2011).
Multidimensional Poverty Measurement in Pakistan :Time Series
Trends and Breakdown
