Fuzzy measures of the incidence of relative poverty and deprivation: a multi-dimensional perspective

Abstract

In this paper we present a methodology for the study of multi-dimensional aspects of poverty and deprivation. The conventional poor/non-poor dichotomy is replaced by defining poverty as a matter of degree, determined by the place of the individual in the income distribution. The fuzzy poverty measure proposed is in fact also expressible in terms of the generalised Gini measure. The same methodology facilitates the inclusion of other dimensions of deprivation into the analysis: by appropriately weighting indicators of deprivation to reflect their dispersion and correlation, we can construct measures of non-monetary deprivation in its various dimensions. These indicators illuminate the extent to which purely monetary indicators are insufficient in themselves in capturing the prevalence of deprivation. An important contribution of the paper is to identify rules for the aggregation of fuzzy sets appropriate for the study of poverty and deprivation. In particular, we define a ‘composite’ fuzzy set operator which takes into account whether the sets being aggregated are of a ‘similar’ or a ‘dissimilar’ type. These rules allow us to meaningfully combine income and the diverse non-income deprivation indices at the micro-level and construct what we have termed ‘intensive’ and ‘extensive’ indicators of deprivation. We note that mathematically the same approach can be carried over to the study of persistence of poverty and deprivation over time.