Multidimensional poverty assessment: applying the capability approach

The purpose of this paper is to compare the assessment of poverty/deprivation using different conceptions of this phenomenon including the traditional money‐metric measure and different forms of multidimensional constructs.

The data were drawn from a household survey conducted in Nsukka, Nigeria. Interviewer‐administered questionnaires were used in data collection from about 410 households across urban and rural localities. The counting and FGT methodologies were used to assess impoverishment, while regression analyses were used to assess the determinants of deprivation across different constructs.

Between 70 per cent and 78 per cent of the study population were identified as poor/deprived. However, more than 11 per cent of those living on less than USD1.25/day were classified as non‐poor using different measures of multidimensional poverty. Similarly, more than 62 per cent of individuals who live on more than 1.25USD/day (i.e. non‐poor) are classified as poor using different measures of multidimensional deprivation. There is some level of correlation between measures, some inevitably stronger than others. The major determinants of deprivation across the various constructs of deprivation include large family size, low level of education, poor employment, rural location, and poor health.

This paper uses novel datasets that incorporate variables relating to the capability approach in understanding deprivation. Specifically, it analyses the so‐called missing dimensions of poverty. It also applies a new methodology for the assessment of impoverishment and deprivation. It highlights the importance of the capability approach in explaining poverty.