An Econometric Approach to Design a Multidimensional Poverty Measure for Rural Himalayan Areas

Abstract

This study is an effort to design a multidimensional poverty measure for rural Himalayan areas. It investigated the level of multidimensional poverty and the underlying causes. The study aimed to identify the major causes of multiple deprivations using indicators of Global MPI. Then, an econometric technique was used to identify the dominant causes for designing a robust area-specific Multidimensional Poverty Index to offer critical policy insights. The findings revealed that 13 per cent of the sampled households were multi-dimensionally poor. The prominent causes were income-related, infrastructure and facilities-related, household/domestic problems, health problems, education, awareness and expense problems. However, income-related problems had dominantly affected households in most of the indicators. The study investigated the antecedents using NLPCA and found that only six dimensions can be retained using these causes. Based on dominant grounds, it is recommended to use these retained indicators/dimensions for designing MPI to address the actual causes of deprivation for sustained poverty alleviation.