Multidimensional Index: A Note

NO : WP-2024-007

AUTHOR : Srijit Mishra

TITLE :  Multidimensional Index: A Note


This paper identifies the problem of information loss in computation of multidimensional index on account of cut-offs between and within dimensions. The former refers to the cutoff across dimensions on account of headcount fetish and the latter points to the restrictions on normalised deprivation score on account of deprivation line as benchmark. One also observes information loss when available data is converted to binary form. An empirical exercise substantiates the points. We suggest that the computation of multidimensional index in deprivation (poverty) and attainment (empowerment) should do away with these information loss by not censoring, by replacing deprivation line with maxima, where appropriate, as benchmark for computing normalised deprivation score, and by not converting available data to binary form.

Keywords: Attainment, Censoring, Deprivation, Headcount fetish, Information loss, Multidimensional index

JEL Code: C38, D63, H89, I32, O10, Z13, Z18