Multidimensional Poverty Analysis in Polish Gminas
Multidimensional Poverty Analysis in Polish Gminas

Summary/Abstract: Until the early seventies most welfare measures were based on income as an indicator of individual well-being. This narrow focus on income has been criticized by such prominent researchers as Nobel Prize winners, Joseph Stiglitz and Amartya Sen. It is now widely accepted in the economic literature that well-being and hence, the shortfall of well-being, namely poverty deprivation, is a multidimensional concept. This idea is reflected in such renowned initiatives as Stiglitz-Sen-Fitousi commission, created in 2008 by the French government with the aim of proposing new ways of measuring economic performance and social progress and the launch of Better Life Index by OECD in 2010. Governments of countries such as France, United Kingdom, Japan and Canada have been recently increasingly attending to the topic of measuring socio-economic progress. In particular, the goal is to go beyond GDP per capita as a sole indicator of well-being. The literature on the measurement of well-being has largely addressed income wellbeing of individuals or of households. Yet well-being exists along multiple dimensions of which income is just one. Characteristics such as health, education, and housing are also relevant well-being factors. Income can partially be used as a proxy for them; however, there are also sources of well-being other than income. Educational outcomes may depend on factors such as the availability of schools, legislation regarding child labor, and labor market opportunities. As the empirical literature shows [Jensen, Skyt Nielsen 1997], there does not necessarily have to be much association between these factors and individual or household income, hence income well-being indices will be to a large extent inadequate in evaluating social progress. Also, measures of well-being based only on income do not account for the possibility that in many countries services such as health care or education are provided by the state. Therefore, it does not have to be the case that, for example, income poor have also low education and indeed sometimes the real picture is more complicated. Alkire and Santos [2010] show that there is nearly 40 percent of income poor in Ethiopia but, on the other hand, as much as 90 percent poor when health and education are also considered.

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