International Journal of Sociology and Social Policy

Purpose – This paper aims to present a multi-dimensional measure of poverty. The proposed method has been applied to the Panel Set of Belgian Households dataset for Belgium for the years between 1994 and 2000.

Design/methodology/approach – First, a common model is decided upon by exploratory factor analysis, and applied by confirmatory factor analysis. Cluster analysis (CA) is then used to separate the multi-dimensional poor. Finally, the possible causes of multi-dimensional poverty are surfaced by estimating a discrete duration model.

Findings – The proposed method reveals three dimensions of poverty: “material deprivation”, “social deprivation” and “psychological health”. Between 9 and 11 per cent of the representative sample of Belgian individuals are poor. The paper also identifies causes of poverty, including not having a job, not having the Belgian nationality, having a poor health or a disability, being lower educated, experiencing financial poverty, being divorced or widowed, living in the Walloon or Brussels regions, and having a bad psychological health.

Research limitations/implications – Research implications include the use of polychoric and tetrachoric correlations as a starting point of factor analysis, as well as the combination of factor analysis and CA.

Originality/value – The paper proposes an alternative multi-dimensional measure of poverty. It argues that previous measures may suffer from categorisation errors and suggests a solution to this problem. The advantages of the proposed method are that all information is used to disentangle the poor from the non-poor and that dimensions of poverty are defined using the correlations between deprivations. Finally, the paper identifies “psychological health” as one of the dimensions of poverty.