On Track or Not? Projecting the Global Multidimensional Poverty Index
This paper proposes a framework for modelling projections of multidimensional poverty. We use recently published data of changes over time in multidimensional poverty for 75 countries which is based on time-consistent indicators. We consider and evaluate different approaches to model the trajectories of countries in poverty reduction. Our preferred model respects theoretical bounds, is supported by empirical evidence, and ensures consistency of our main measures with its subindices. In our empirical analysis we first use this approach to examine whether countries would halve their poverty between 2015 and 2030 if recent trends continued before we assess the reasonableness of this target. Subsequently, we discuss implications of our modelling framework for computing projections under sustained efforts, setting poverty reduction targets, and the evaluation of trajectory switches. These implications mainly follow from the bounded nature of our outcome variables and are, therefore, applicable to a wide array of development indicators.
Discussant: Doug Gollin (Oxford University)