Poverty in Canada: Unidimensional and Multidimensional Measures - - PowerPoint PPT Presentation

Poverty in Canada: Unidimensional and Multidimensional Measures

Presented by: Lori J Curtis, PhD Department of Economics

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

Unidimensional Measures

• f Poverty
• Can a single measure, such

as GDP/capita, income or expenditure, adequately represent the experience of poverty (Atkinson, 2003; Sen, 2006)?

Multidimensional Measures

• f Poverty
• Is aggregating multiple

measures of attainments or deprivations into a single multidimensional measure better?

• subjective measures
• Weights
• Cut-offs

Background

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017 PAGE 2

Background

• GDP measures have been used as an indication of the

economic well-being (UNDP, 2016).

• viable indicator of aggregate economic growth
• limited as a description of the experience of wellbeing
• household production or the underground economy?
• health, leisure, environment, political freedom, or social justice?
• Income/expenditure historically commonly used measure in

micro-level poverty studies.

• household production?
• health, leisure, environment, political freedom, or social justice?

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017 PAGE 3

Background

• Multidimensional measures of well-being/poverty gaining traction.
• In developing countries
• Multidimensional Poverty Index (MPI) (Alkire & Santos, 2010)
• Human Development Index (UNDP, 2010)
• Beginning in developed countries
• European Union (Alkire et al., 2014, Whelan et al 2014).
• US (Mitra & Brucker, 2014; Dhongde & Haveman, 2015).
• Canada (UNDP, 2016; Canada Index of Wellbeing, 2016)

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017 PAGE 4

Background

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Background

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Background

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Background

• Some countries have developed survey instruments for MDPI (see

for example the Global MDPI project at http://www.ophi.org.uk/).

• Some have high quality longitudinal survey data to develop the

instruments

• EU-SILC data in the European Union (Alkire et al., 2014, Whelan et al., 2014)
• Germany – SOEP (Suppa, 2016)
• Others parse together indicators using available data
• American Community Survey (Dhongde & Haveman, 2015)
• Current Population Survey and American Community Survey data (Mitra &

Brucker, 2014)

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017 PAGE 8

Data

• This study compares constructed MDP measures with

‘traditional’ measures of poverty using multiple nationally representative data sources (pumf files)

• Cansim tables 384-0038 and 051-0005 are used to calculate the

growth in GDP/capita over time. (http://www5.statcan.gc.ca/cansim)

• Survey of Household Spending (SHS) – 2003, 2005, 2007, and 2009
• Canadian Community Health Survey (CCHS) - 2003, 2005, 2007,

2009, and 2012

• Waiting for access to Master files of SHS and CCHS

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017 PAGE 9

Methods

• Growth GDP/capita is % change in annual expenditure based real GDP/population

(chain-linked).

• SHS Income and expenditure measures are estimated per Crossley and Curtis, 2006.
• Households are considered poor if they have adjusted income or expenditure ≤ 0.5*median.
• MDP dimensions, indicators, and thresholds a la Dhongde & Haveman’s (2015)
• CCHS indicators are reported for households
• Statistics Canada weights are multiplied by household size

poverty head counts.

• Paper presents sensitivity analysis of many measures – here present growth in GDP/capita,

income and expenditure from SHS, Multidimensional from CCHS

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017 PAGE 10

Multidimensional Poverty Dimensions and Indicators Dimensions Indicators Health No Regular MD Household does not have a regular family physician Disability A household member is limited in activities by a disability Education No High School Highest adult educational level in household is less than high school certificate No Eng/Fr Speaker No one in household speaks an official language Standard of Living No Employment Major source of household income is not employment income Low Income Household income (adjusted) is in the bottom quintile of the income distribution. Housing Do Not Own Home The house is not owned by a member of the household Crowded There is not a bedroom for parent(s) and each child Food Insecure Food Insecure Index

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

Mutlidimensional Poverty measure - CCHS

Sensitivity

• MDP1 = No MD + Disability + No High school + No Eng/Fr + No employ income+ low

income + crowded + house not owned

• MDP3 = No MD + Disability + No High school + No Eng/Fr + No employ income+ low

income + food insecure + house not owned MDP 5 = MDPH without language (SHS comparison)

• MDP 7 = MDP H dropping PEI and NB (not available in 2009)
• MDP2 = MDP1 without home ownership
• MDP 4 = MDP 3 without home ownership
• MDP 6 = MDP 5 without home ownership
• MDP 8 = MDP 7 without home ownership
• MDP(H) = MDP1 (03 – 07) and MDP3 (09-12)
• MDP(NH) = MDP2 (03 – 07) and MDP4 (09-12)

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

Indicators in CCHS

Proportion of Individuals with stated Indicator in CCHS 2003 2005 2007 2009 2012 No MD 0.1413 0.1437 0.1597 0.1589 0.1545 Health

0.0014 0.0014 0.0015 0.0015 0.0021

Disability 0.1068 0.1116 0.1064 0.0901 0.1121

0.0012 0.0013 0.0012 0.0012 0.0019

No High school 0.0479 0.0366 0.0962 0.0889 0.0925 Education

0.0009 0.0008 0.0012 0.0012 0.0017

No Language 0.0148 0.0110 0.0148 0.0142 0.0083

0.0005 0.0004 0.0005 0.0005 0.0005

No Employ Income 0.0453 0.0433 0.0479 0.0484 0.0518 Standard of Living

0.0008 0.0008 0.0009 0.0009 0.0013

Low Income 0.0638 0.1468 0.1480 0.1500 0.1402

0.0010 0.0014 0.0014 0.0015 0.0020

No Own Home 0.2080 0.1946 0.2213 0.2148 0.2353 Housing

0.0016 0.0016 0.0017 0.0017 0.0025

Crowded 0.1283 0.1024 0.1013

0.0013 0.0012 0.0012

Food Insecure 0.0813 0.0663 0.0806

0.0014 0.0010 0.0016

*Canadian respondents 25 to 64 years of age (2009 where PEI and NB are excluded – see text for explanation)

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

Tetrachoric Correlations between Indicators CCHS 2007 No Regular MD Disability No High School No Empl Inc Low Income Not Own Home Crowd Food Insecure No English Speaker No Regular MD 1.0000 Disability

• 0.1510

No High School 0.0485 0.3201 1.0000 No Employment Income 0.0620 0.4360 0.4106 1.0000 Low Income 0.1345 0.3419 0.3911 0.6926 1.0000 Does Not Own Home 0.3008 0.1574 0.2310 0.4702 0.5933 1.0000 Crowded (<1 rm/person) 0.1562

• 0.0069

0.1579 0.3071 0.4966 0.4783 1.0000 Food Insecure 0.1076 0.3717 0.2949 0.5514 0.6394 0.5173 0.3963 1.0000 No English Speaker 0.0651 0.0423 0.3188 0.2297 0.4209 0.2635 0.2695 0.2522 1.0000

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

Correlation Matrix Multidimensional Poverty Counts CCHS 2007 MDP1 Count MDP2 Count MDP3 Count MDP4 Count MDP5 Count MDP6 Count MDP7 Count MDP8 Count MDP1 Count 1.0000 MDP2 Count 0.9460 1.0000 MDP3 Count 0.9528 0.8937 1.0000 MDP4 Count 0.8826 0.9296 0.9455 1.0000 MDP5 Count 0.9945 0.9376 0.9470 0.8739 1.0000 MDP6 Count 0.9388 0.9917 0.8859 0.9207 0.9439 1.0000 MDP7 Count 0.9516 0.8832 0.9038 0.8196 0.9561 0.8879 1.0000 MDP8 Count 0.8887 0.9269 0.8354 0.8558 0.8925 0.9333 0.9448 1.0000

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

Tetrachoric Correlations Multidimensional Poverty Score ≥ 2 CCHS 2007 MDP1 Count ≥ 2 MDP2 Count ≥ 2 MDP3 Count ≥ 2 MDP4 Count ≥ 2 MDP5 Count ≥ 2 MDP6 Count ≥ 2 MDP7 Count ≥ 2 MDP8 Count ≥ 2 MDP1 Count ≥ 2 1.0000 MDP2 Count ≥ 2 0.9791 1.0000 MDP3 Count ≥ 2 0.9708 0.9436 1.0000 MDP4 Count ≥ 2 0.9408 0.9632 0.9693 1.0000 MDP5 Count ≥ 2 0.9949 0.968 0.9684 0.9312 1.0000 MDP6 Count ≥ 2 0.9792 0.9946 0.9389 0.9518 0.978 1.0000 MDP7 Count ≥ 2 0.9619 0.9289 0.935 0.8798 0.9682 0.9349 1.0000 MDP8 Count ≥ 2 0.9361 0.9591 0.8943 0.9043 0.9364 0.9602 0.9619 1.0000

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

0.0000 0.0500 0.1000 0.1500 0.2000 0.2500 MDP H MDP NH MDPC 1 MDPC 2 MDPC 3 MDPC 4 MDPC 5 MDPC 6 Proportion of Population

Sensitivity Analysis

2003 2005 2007 2009 2012

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

0.05 0.1 0.15 0.2 0.25 2003 2005 2007 2009 2012 Proportion of Population

Poverty Measures with and without NB and PEI

MDP H MDP NH MDPsm H MDPsm NH

Economics

• 0.05

0.05 0.1 0.15 0.2 0.25 GDP/cap Income Expend MDP H MDP NH Proportion of Population

Well being/Poverty Measures

2003 2005 2007 2009 2012

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

10 20 30 40 50 60 2003 2005 2007 2009 2012

Percent of Population

MDP Counts with Housing CCHS

1 2 3 4 5 6 7 8 mdp1u mdp1i mdp≥2

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

10 20 30 40 50 60 70 2003 2005 2007 2009 2012

Percent of Population

MDP Counts without Housing CCHS

1 2 3 4 5 6 7 mdp2u mdp2i MDP

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

Multidimensional Poverty Index, MPI (𝑁0)* 2003 2005 2007 2009 2012 M0 (H) 0.056 0.061 0.073 0.066 0.073 M0 (NH) 0.032 0.038 0.047 0.041 0.044

*weighted average deprivations experienced by the multidimensional poor.

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

1 2 3 4 5

Atlantic QUE ONT Prairies BC Atlantic QUE ONT Prairies BC Atlantic QUE ONT Prairies BC Atlantic QUE ONT Prairies BC 2003 2005 2007 2009

Ranking

Regional Ranking by Measure

GDP Income Exp MDP H MDP NH

Income, Expenditure & Multidimensional Poverty by Family Type 2003 2005 2007 2009 Inc Exp MDP H MDP NH Inc Exp MDP H MDP NH Inc Exp MDP H MDP NH Inc Exp MDP H MDP NH Single 0.22 0.04 0.40 0.22 0.21 0.03 0.41 0.24 0.21 0.04 0.43 0.26 0.19 0.02 0.44 0.27 Couple 0.05 0.02 0.14 0.07 0.06 0.02 0.14 0.08 0.04 0.01 0.17 0.10 0.04 0.01 0.17 0.10 Two Parent 0.06 0.02 0.14 0.09 0.07 0.02 0.15 0.11 0.07 0.03 0.17 0.13 0.07 0.02 0.14 0.10 Lone Parent 0.28 0.07 0.41 0.26 0.27 0.06 0.44 0.33 0.27 0.07 0.45 0.33 0.25 0.07 0.43 0.33

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

Multidimensional Poverty by Immigrant Status - CCHS 2003 2005 2007 2009 2012 H NH H NH H NH H NH H NH Native Born 0.151 0.093 0.161 0.108 0.181 0.122 0.169 0.114 0.186 0.117 Immigrant < 10 yrs 0.479 0.306 0.475 0.337 0.500 0.356 0.459 0.279 0.472 0.250 Immigrant ≥ 10 yrs 0.188 0.098 0.201 0.151 0.240 0.191 0.193 0.139 0.253 0.176

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

Conclusions….

• Individual Indicators are not highly correlated
• MDP measures are highly correlated
• Surveys provide different levels for indicators and thus poverty
• MDP higher head counts than income and expenditure (generally)
• Income higher levels of poverty than expenditure
• Generally uni and multidimensional trends not very similar
• Ranking changes at provincial level
• Subgroup analyses provide similar trends
• GDP growth most inconsistent with the other measures

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

Conclusions….

• ???? Right measure???
• Assumption seems to be MDP best captures experience but???
• Policy –
• No official poverty measure in Canada
• Who decides which measure is best?
• Who decides which indicators are important?
• If poverty alleviation important goal need consistent measure
• Then need consistent data
• LFS legislated to provide consistent data over time for Urate etc.
• Could we do the same for poverty measures?

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

Thank You

Comments Appreciated ljcurtis@uwaterloo.ca