Appendix

Adjusted Headcount Ratio (M₀)-Interpretation

The proportion of deprivations that poor people in a society experience, as a share of the deprivations that would be experienced if all persons were poor and deprived in all dimensions of poverty.

Alkire-Foster methodology

The AF methodology uses dual cutoffs to identify who is poor according to the weighted sum of ‘joint' deprivations a person experiences, and measures poverty using an extension of the FGT measures. AF measures are consistent with subindices that show the incidence and intensity and dimensional composition of poverty and, for cardinal variables, the depth and severity of deprivations in each dimension. The AF methodology can be used with different indicators, weights, and cutoffs to create measures for different societies and situations.

Censored headcount ratio

The proportion of people who are multidimensionally poor and deprived in a given indicator.

Censoring

This is the process of removing from consideration deprivations (achievements) belonging to people who do not reach the poverty (deprivation) cutoff and focusing on those who are multidimensionally poor (deprived).

Decomposition

The process of breaking down the poverty measures to show the poverty of different groups. Groups might include countries, regions, ethnic groups, urban versus rural location, gender, age, or occupational categories, or other groups.

Deprivation cutoffs (zj)

The achievement levels for a given dimension below which a person is considered to be deprived in a dimension or indicator.

Deprived

A person is deprived if their achievement is strictly less than the deprivation cutoff in any dimension.

Functionings

Functionings are ‘the various things a person may value doing or being' (Sen 1999: 75). In other words, functionings are valuable activities and states that make up people's

well-being—such as being healthy and well nourished, being safe, being educated, having a good job, and being able to visit loved ones.

Incidence (H)

The proportion of people (within a given population) who experience multidimensional poverty. This is also called the ‘multidimensional headcount ratio' or simply the ‘headcount ratio'. Sometimes it is called the ‘rate' or ‘incidence' of poverty. It is the number of poor people q over the total population n.

Intensity (A)

The average proportion of deprivations experienced by poor people (within a given population) or the average deprivation score among the poor. The intensity is the sum of the deprivation scores, divided by the number of poor people.

Percentage contribution of each indicator

The extent to which each weighted indicator contributes to overall poverty.

Poor

A person is identified as poor if their deprivation score (the sum of their weighted deprivations) is at least as high as the poverty cutoff.

Poverty cutoff (k)

This is the cutoff or cross-dimensional threshold used to identify the multidimensionally poor. It reflects the proportion of weighted dimensions a person must be deprived in to be considered poor. Because having more deprivations (a higher deprivation score) signifies worse poverty, the deprivation score of all poor people meets or exceeds the poverty cutoff.

Uncensored or raw headcount ratios

The deprivation rates in each indicator, which include all people who are deprived, regardless of whether they are multidimensionally poor or not.