Towards a Multidimensional Poverty Index for Germany

This paper compiles a multidimensional poverty index for Germany. Drawing on the capability approach as conceptual framework, I apply the Alkire-Foster method using German data. I propose a comprehensive operationalization of a multidimensional poverty index for an advanced economy like Germany, including a justification for several dimensions. Income, however, is rejected as a dimension on both conceptual and empirical grounds. I document that insights obtained by the proposed multidimensional poverty index are consistent with earlier findings. Moreover, I exploit the decomposability of the Alkire-Foster measure for both a consistently detection of specific patterns in multidimensional poverty and the identification of driving factors behind its changes. Finally, the results suggest that using genuine multidimensional measures makes a difference. Neither a single indicator nor a dashboard seem capable of replacing a multidimensional poverty index. Moreover, I find multidimensional and income-poverty measures to disagree on who is poor.

Citation: Suppa, N. (2015). 'Towards a Multidimensional Poverty Index for Germany,' OPHI Working Paper 98, Oxford Poverty and Human Development Initiative (OPHI), University of Oxford.

Also published in Empirica, 2018, Vol. 45, pp. 655–683.