An analytical comparison between income poverty and multidimensional poverty for a group of developing countries

Abstract

Poverty can be summarized as not just a lack of income but also a lack of basic human capabilities that covers both monetary and non-monetary poverty. The income poverty line reflects the critical aspects of poverty, which can accurately reflect non-monetary aspects under normal circumstances, as people's income increases and with good social policies, both monetary and non-monetary well-being will be improved to a certain extent. This study explaines and analyzes the theoretical relationship between income poverty and multi-dimensional poverty, and explore empirical linkages and inconsistencies between these two types of poverty by using the Alkire-Foster (AF) method of measuring multidimensional poverty with the international poverty line (percentage of people living on less than $ 1.90 per day) for 2011-2012. This research concludes that non-monetary well-being is usually linked to the failure of the market in its inability to provide adequate educational and health services to low-income groups. Analytical economic results also suggest that increased incomes can significantly reduce the spread of multidimensional poverty because of its active contribution in every dimension; therefore, it is necessary to give a weighted income in the MPI index to complement each other and to implement social policies based on key human capacities while eliminating income poverty.