Multidimensional Poverty in Germany: A Capability Approach

Abstract

The German government decided to use Amartya Sen's capability approach as the conceptual framework for the national ‘Poverty and Wealth Reports’ but concluded at the same time that the purely income-based at-risk-of-poverty rate (AROPR) is a satisfactory instrument to operationalise the capability approach. This decision made the latter the official measure to analyse poverty in Germany. This paper studies the question whether this conclusion is indeed justified by introducing two different multidimensional poverty measures to operationalise the capability approach. A thorough empirical analysis compares the poverty evaluations of the three poverty measures over time. It reveals that they differ considerably with regard to poverty trends, the identification of the most deprived and the impact of location, especially regarding West and East Germany, which may have considerable implications for targeting and demonstrates that there is indeed an urgent need for multidimensional poverty measures that complement the traditional AROPR.