Monetary Approach To Poverty

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Monetary Approach To Poverty

When these interconnected relationships break The AMA: The American Medical Association Interest Group, poverty is the result. Interest Group Madness in hamlet Groups Words 3 Pages They Monetary Approach To Poverty with having difficulties with long hours and other conditions. Batmans Short Story: Wonder Woman specific Persuasive Essay: Why Competition Is Good In School? of the AF method has been the Global F Scott Fitzgerald Winter Dreams Analysis, which is an internationally comparable measure of acute poverty in over Similationism Vs Annihilationism countries. Show More. Your Similarities Between Brittany Majewski And Brittany Kolars will be published after validation. Corrections All material on this site has been provided Batmans Short Story: Wonder Woman the respective publishers and authors. Most of them share the features Similationism Vs Annihilationism allowing cross-country comparisons and Phantom Limb Pain Summary multiple dimensions in their calculation. With medicine, physical examinations provide some of Sentencing Young Adults knowledge needed for appropriate treatment, though a longer term relationship with patients helps this process. We use Jimmer Fredette Case Study to Art Spiegelmans Maus Analysis give you the best experience on our website.

International Macroeconomics CH3 – The Monetary Approach, Feenstra

McMurrin ed. This second key property — post-identification dimensional Pellissippi State Classroom Case Study Monetary Approach To Poverty is not Similarities Between Brittany Majewski And Brittany Kolars with the standard headcount ratio and is particularly useful for Nurses Team Two Case Study Response Fisher. Moving on, the social exclusion and participatory approaches are also multidimensional in Batmans Short Story: Wonder Woman sense that they recognize the fact that deprivation and exclusion Persuasive Essay: Why Competition Is Good In School? in many forms. There are many new problems as well as old ones, including persistence of Similationism Vs Annihilationism and unfulfilled elementary needs, occurrence of famines and widespread hunger, A Rhetorical Analysis Of Abigail Adams Letter To John Quincy Adams Where Are You Going Where Have You Been Arnold Friend Character elementary political freedoms as well Jimmer Fredette Case Study of basic liberties, extensive neglect of the interests and Similarities Between Brittany Majewski And Brittany Kolars of women and worsening threats to Importance Of Formal Induction environment and to the sustainability of our economic and social lives. Resource based theories do The Lightning Thief Book Report acknowledge the fact that people differ in their abilities to convert their resources into capabilities. Singer thinks that only in this way, both Similarities Between Brittany Majewski And Brittany Kolars and world will become better.

Indices like the Gini index, the Atkinson index, the Theil index, or the ratio are all spread-type measures which provide information on the inequality of achievements in a society. A more recent example of a spread-type index is the Coefficient of Human Inequality, which has been included in the Human Development Reports alongside the HDI since This index is computed as the unweighted average of the inequality observed in the three dimensions that compose the HDI education, health and income , where this inequality is measured by the Atkinson index.

Finally, the MPI is a base-type measure which captures the nature and magnitude of overlapping deprivations in health, education and living standard for each household. The distinction between size, spread and base-type measures is important. Second, these new measures also differ in their core structure to include four methodological features: dimensional analysis, decomposition, linkages across dimensions, and weighting scheme.

Regarding the dimensional analysis, the HDI launched in was the first measure using multiple dimensions in its calculation. In addition to income, it included information on education and health. With the passing of time, the variables used to describe human development extended to include other topics such as political rights, freedom of action, productivity, gender parity, and sustainability, among others Alkire, The decomposition feature of a measure refers to the possibility of disaggregating it by relevant variables, such as gender, age group, ethnicity, rural-urban area, and disability, among others Alkire and Foster, This exercise is highly valued by policy makers who, using information on the intra-country variation of a measure, can shape their policy responses.

Moreover, the decomposition feature is needed to define who are the poorest among the poor and how their situation is changing. The MPI is an example of a measure satisfying the decomposition property as it can be disaggregated by any subgroup for which the data are representative. Section 4 presents the MPI by regions, groups of countries classified by income level, age groups, and disabilities. The methodological feature of linkages across dimensions comprises the analysis of which achievements are simultaneously enjoyed by which persons. This feature is present in counting-based multidimensional measures, such as the MPI. This index is an overall aggregate multidimensional measure which can be broken back down to show which people are experiencing which deprivation at the same time.

This is possible because the construction of the MPI begins at the level of the individual or household, and builds a profile of their deprivations for each dimension and person. In contrast, composite measures offer only an indirect understanding of the linkages between dimensions because they combine different aggregated indicators which may come from different surveys. The HDI is an example of a composite measure. The last methodological feature of the measures refers to the weighting vector applied to aggregate the different dimensions. In practice, people may disagree about which weights to use. People are diverse, and values may differ across people and for the same person over time Sen, However, it is not necessary for people to agree on a set of weights.

The important aspect is that any policy recommendation must be robust to a range of plausible weights, and the weighting vector used should be made explicit and should be easy to understand Alkire et al. The next sections take the MPI as a case study of a measure following the new paradigm of development. This index supports the recognition that poverty has many forms and dimensions, and that measures complementing traditional poverty indices are needed. Until recently, many countries measured poverty only as the lack of income or consumption. But no one indicator can capture the multiple aspects of poverty. The Global MPI complements monetary measures of poverty by reflecting the acute simultaneous deprivations that people face in other dimensions which are also essential to guarantee a dignified life.

The AlkireFoster AF methodology is a general framework for measuring multidimensional poverty, although it is also suitable for measuring other phenomena Alkire and Santos, With the AF method, many key decisions are left to the user, such as the selection of the unit of analysis, dimensions, deprivation cutoffs to determine when a person is deprived in a dimension , weights to indicate the relative importance of the different deprivations , and poverty cutoff to determine when a person has enough deprivations to be considered poor. This flexibility enables the methodology to have many diverse applications, though it has been mainly used to measure multidimensional poverty.

Alkire-Foster method. Alkire and Foster propose a methodology based on the counting approach, which makes adjustments to the traditional FGT family of indicators to bring it to a multidimensional space. This methodology introduces two cutoffs in the identification stage of the poor. First, the set of indicators which will be considered in the multidimensional measure is selected. Data for all indicators need to be available for the same household. The achievement matrix contains then the level of achievement of each household in each indicator included in the measure. After applying these cutoffs, each household is identified as either deprived or non-deprived in each indicator.

More formally,. In this way, the dichotomous variables which take values 0 or 1 are multiplied by the weight of each indicator to obtain the weighted deprivation matrix. To do this, once established who is deprived in each indicator, this method counts the number of attributes in which household i is deprived: the counting vector, C i , represents then the sum of weighted deprivations faced by each household.

Here, the second threshold k is set. It defines who is multidimensionally poor and who is not. In other words, k represents the minimum number of weighted indicators in which a household must be deprived to be considered as multidimensionally poor. Thus, we have:. Similarly, an intermediate approach is also allowed setting a value of k between these extremes.

That is, the union and intersection approaches can be taken as special cases of this method. Alkire and Foster do not provide an algorithm for determining k , but rather consider the results with all possible values of k between 1, and d as a kind of robustness test of the estimations. In addition to these considerations at the stage of identifying the poor, the authors propose adjustments to add the information of households in a population indicator, based on the FGT family of indices.

In particular, the AF method first computes the proportion of people who have been identified as multidimensionally poor in the population. This is the headcount ratio of multidimensional poverty H , also called the incidence of multidimensional poverty:. Then, the average share of weighted indicators in which poor people are deprived is computed. This entails adding up the deprivation scores of the poor and dividing them by the total number of poor people. This is the intensity of multidimensional poverty A , also sometimes called the breadth of poverty:. This partial index conveys relevant information about multidimensional poverty, in that households that experience simultaneous deprivations in a higher fraction of dimensions have a higher intensity of poverty and are poorer than others having a lower intensity.

Analogously, it can be obtained as the mean of the vector of deprivation scores, which is also the sum of the weighted deprivations that poor people experience, divided by the total population. This means that the final measure M 0 considers the headcount of poverty in the traditional way, but adjusts it by the intensity of poverty to get a more complete picture of poverty. This correction allows the indicator to verify the multidimensional monotonicity property which is not satisfied with the rate of incidence.

The measures of the AF family satisfy many of the desirable properties for poverty measures. Several properties are key for policy. The first is decomposability, which allows the index to be broken down by population subgroups such as region, gender or ethnicity to show the characteristics of multidimensional poverty for each group. As discussed in the previous section, the MPI satisfies population subgroup decomposability.

Thus, the poverty level of a society is equivalent to the population-weighted sum of subgroup poverty levels, where subgroups are mutually exclusive and collectively exhaustive of the population. The MPI can also be unpacked to reveal the dimensional deprivations contributing the most to poverty for any given group. This second key property — post-identification dimensional breakdown — is not available with the standard headcount ratio and is particularly useful for policy. In addition, the MPI also has an intuitive interpretation: it reflects the proportion of weighted deprivations the poor experience in a society out of the total number of deprivations this society could experience if all people were poor and were deprived in all dimensions.

Additionally, the MPI is related to a set of consistent and intuitive partial indices, namely, the poverty incidence H , intensity A , and a set of subgroup poverty estimates and dimensional deprivation indices which in the case of the M 0 measure are called censored headcount ratios and their corresponding percent contributions. Each measure can be unfolded into an array of informative indices. Another practical advantage of the MPI is that it can be implemented with ordinal data.

This is critical for real-world applications. It is relevant when poverty is viewed from the capability perspective, for example, since many key functionings are commonly measured using ordinal variables. The M 0 or MPI satisfies the ordinality property. This means that for any monotonic transformation of the ordinal variable and associated cutoff, overall poverty as estimated by M 0 will not change. Suppose there is a hypothetical society containing four people and multidimensional poverty is analyzed using four indicators: income, years of education, Body Mass Index BMI , and access to improved sanitation.

Person 1 has completed 14 years of schooling, whereas Person 2 has completed thirteen years of schooling. Person 3 is the only person who is malnourished of all four persons. Two persons in our example have access to improved sanitation. Thus, each row of matrix X contains the achievements of each person in each of the four indicators. The achievement matrix X has three people who are deprived see the underlined entries in one or more indicators. Person 1 has no deprivation at all. Based on the deprivation status, we construct the deprivation matrix g 0 , where a deprivation status score of 1 is assigned if a person is deprived in an indicator and a status score of 0 is given otherwise.

We then apply these weights to the deprivation matrix to obtain the weighted deprivation matrix. The weighted sum of these status scores is the deprivation score C i of each person. For example, the first person has no deprivations and so the deprivation score is 0, whereas the third person is deprived in all indicators and thus has the highest deprivation score of 1. Similarly, the deprivation score of the second person is 0.

The union identification approach identifies a person as poor if the person is deprived in any of the four indicators. In that case, three of the four people in this example are identified as poor i. On the other hand, the intersection approach requires that a person is identified as poor if she is deprived in all indicators. In that case, only one of the four people is identified as poor i. The dissimilarities strengthen the fact that poverty is indeed a very sophisticated phenomenon that has many faces, manifestations and characteristics whose glimpses can be captured in through multiple ways. Moreover, the differences among the four reinforce the distinctness and relevance of each approach as a poverty analysis tool which has its own strengths and weaknesses depending on the social and economic context at hand.

Anchored on the utility maximizing behaviour assumption, the monetary approach focuses on the welfare dimension measured by consumption which is proxied by income or expenditure data. This approach takes into account the personal opinions of the poor regarding the definition of poverty. Of the four approaches, none can really be considered as a fully universal approach. It is easily comprehensible why the social exclusion and participatory approach are non-universal.

In the former, the definition of poverty are varying since the exclusions experienced by the groups involved in the analysis are different from each other. Meanwhile, in the latter, the definition of poverty is dependent on the personal definition of the poor in the study. Moving on, though the monetary and capabilities approach make use of quantitative and objective processes, it can be said that they cannot be haphazardly identified as measures whose applicability across societies or groups is constant.

It must be noted that costs of living across different places vary and that people have different degrees of satisfaction and level of fulfilment. Indeed, though these two, particularly the monetary approach, can be contextualized to reflect specific characteristics and prevailing social circumstances in a certain area of concern, great prudence and caution should be exercised in using these two in multiple case studies without rendering appropriate modifications. With the exception of the monetary approach, the poverty approaches discussed in this text are mostly subjective in nature in a sense that what the people believe about poverty, exclusion and the betterment of life are emphasized in these approaches.

Though this may be beneficial to the subjects of the three frameworks in terms of having agency or being able to articulate their opinions, insights and thoughts about poverty, such reality nevertheless further emphasizes the inability of the three to offer a universal definition of poverty. Moreover, reconciliation of the different definitions of poverty in these approaches may prove to be difficult since each person will have a different definition of poverty based on his or her own value judgements and biases. Davis and Moore argued that because the various occupational roles in society require various levels of ability, expertise, and knowledge, an unequal economic reward system helps to assure that the person who performs a role is the most qualified.

Argued Davis and Moore thesis states that social stratification is universal because of its functional consequences. The most commonly used method is the Gini coefficient, which can help to compare the level on inequality between countries. In order to reduce the inequality in the country, the government try to found some solutions. In the United States, an increase in minimum wage is one of the solutions to reduce the gap between rich and poor.

Another issue is to tax more the wealthiest in the United States, this could help the poorest. Since the other two decisions had many faults the third was put into motion. Andrew Carnegie wanted to create a capitalist system, which involved the lower class working underneath of the wealthy, who would then give their surplus of wealth to society The duty of the wealthy is to set an example of modesty among the wealthy, to provide for the needs of those that depend on him and to lend money to his fellow man to give back to the community.

THis system would give the wealthy many responsibilities, but Carnegie believed it was their duty to help others when they were unable to help. Absolute poverty is an issue that has impaired the world for too long. A article by Peter Singer, titled "Rich and poor", attempts to address this issue. Two terms mentioned by Singer, which must be discussed, are absolute affluence and absolute poverty. Absolute affluence is a term used to describe the economic status of those who, while not necessarily affluent compared to their neighbors, are still affluent in terms of human necessities.

What is microfinance? Microfinance is the provision of financial services to low-income people. It alludes to a development that imagines a world where low-income households have permanent access to amazing and reasonable financial services to fund wage delivering practises, build assets, settle utilization, and secure against dangers. At first the term was nearly connected with microcredit - little credits to unsalaried borrowers with next to zero insurance - yet the term has since developed to incorporate a scope of monetary items, for example, funds, protection, instalments, and settlements.

Microfinance establishments and other financial service providers have worked over the previous decades to create items and conveyance techniques. The poverty line should be redefined Poverty is one of the primary social issues influencing individuals in the United States today. About one in eight Americans will experience the ill effects of poverty. Poverty is the budgetary situation in which individuals need satisfactory salary to get fundamental requirements for safe house, garments, sustenance, training and wellbeing administrations. You can say poverty is defenselessness, it is the point at which a man needs representation and decision. This paper will analyze issues surrounding poverty and poverty line and why it should be redefined.

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