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Nov. 25, 2016

Measuring Poverty in Japan froma Multidimensional Perspective
JUN MATSUYAMAD E PA R T M E N T O F E C O N O M I C S , U N I V. O F TOYA M A ( JA PA N )OutlinezMotivation
zMethodzData and the MPI

zResults
zConclusion

The monetary and child poverty rates inJapan: 1985-2012
1985 1988 1991 1994 1997 2000 2003 2006 2009 2012
Monetary poverty rate
Child poverty rate

Note: Japan’s Ministry of Health, Labor and Welfare, Report on 2012 Comprehensive Survey of Living
http://www.mhlw.go.jp/toukei/saikin/hw/k-tyosa/k-tyosa13/

Amartya Sen’s capability approachzA person’s well-being should be defined and assessed not
only by resources but also by functionings and capabilities• Functionings: being and doing that people value and reason tovalue• Capabilities: the various combinations of functionings that theperson can achieve (Sen, 1992, p.40)

zAccording to the capability approach, a person’swell-being should be multidimensional in nature.

The aims of paper
zPoverty issues are often discussed in terms of just aneconomic dimension such as income. However, given that aperson's well-being is considered to be multidimensional,concentrating only on income may fail to provide a real
image that we want to capture.
zWe try to measure poverty from a multidimensional pointof view. Specifically, we define a multidimensional poverty
index consisted of three dimensions such as consumption,wealth, and dwelling environment. Then, the exercise canshed light on a new aspect of poverty issue in Japan.

The aims of paper (contd.)zThe paper tries to capture poverty profiles for Japan from amultidimensional perspective.
zWe will focus on intertemporal changes in
multidimensional poverty in Japan. Based on the Japan’s
National Survey of Family Income and Expenditures (theNSFIE), we compute the nationwide MPI for the 1989, 1994,
1999 and 2004 survey.
zWhen households are classified as four categories such as
single parent, both parent, three generation and no childhousehold, we calculate the MPI by household types.

Literature Review
zConceptual framework on multidimensionality of well-being• Seminal works of Amartya Sen
zRepresentative theoretical studies on multidimensional poverty• Tsui (2002)• Atkinson (2003)• Bourguignon and Chakravarty (2003)• Alkire and Foster (2011): the Alkire-Foster methodology

Literature Review (contd.)z Intertemporal changes in multidimensional poverty• Alkire et.al. (2015) Chap. 9• Levine, S., Muwonge, J., and Batana, Y. M. (2014): analysis in recent
reductions in poverty in Uganda
zChild poverty in Japan using the NSFIE• Movshuk (2015) : comparing consumption based poverty measure withincome based poverty measure. Consumption is a better measurecompared to income.

э My paper stands at the intersection of two lines of researches

The Alkire-Foster methodology
zAlkire and Foster (2011)䞉Specify a class of multidimensional poverty measures
䞉An extension of a class of the unidimensional poverty measure by

Foster, Greer, and Thorbecke (1984)

The Alkire-Foster method:
IdentificationzAchievement matrix:
‫ݕ‬ଵଵ
‫ڭ‬
‫ݕ‬ேଵ

‫ݕ ڮ‬ଵ஽
‫ڰ‬‫ ڭ‬.
‫ݕ ڮ‬ே஽

zThe achievement of individual i in dimension d,‫ݕ‬௜ௗ ൒ Ͳ.
zThe 1㽢D vector z, with‫ݖ‬ௗ ൐ Ͳ
the deprivation cutoff in dimension d.

The Alkire-Foster method:
Identification (Contd.)
zDeprivation matrix by following ruleͳ ݂݅ ‫ݕ‬௜ௗ ൏ ‫ݖ‬ௗǡ݀௜ௗ ൌ ቊͲ ‫݁ݏ݅ݓݎ݄݁ݐ݋‬Ǥ
zThe weighted deprivation score for person iܿ௜ ǣ ൌ σ஽ௗୀଵ ‫ݓ‬ௗ ݀௜ௗ ,where ‫ݓ‬ௗ is a weight for dimension d and σ஽ௗୀଵ ‫ݓ‬ௗ ൌ ͳǤThe Alkire-Foster method:
Identification (Contd.)zIdentification function ߩ௞ is given asͳ ݂݅ ܿ௜ ൒ ݇ǡ ݇ ൌ ͳǡ ǥ ‫ܦ‬ǡߩ௞ ሺ࢟࢏ ǡ ࢠሻ ൌ ቊͲ ‫݁ݏ݅ݓݎ݄݁ݐ݋‬Ǥ, where ࢟࢏ is the 1㽢D vector.
zTwo polar cases
 Union approach: k=1.
 Intersection approach: k=D.

The Alkire-Foster Methodology:
Aggregation
zThe headcount ratio is defined byσಿ ఘ ሺ࢟࢏ ǡࢠሻH= ೔సభ ೖேzThe intensity of poverty is defined byA=σ೔‫א‬ುሺೖሻ ௖೔ȁ௉ ௞ ȁ஽

, where P(k) is the set of the poor in terms of k.
zThe adjusted headcount ratio is defined byσ೔‫א‬ುሺೖሻ ௖೔

M0 =ேȉ஽

The Alkire-Foster Methodology:
Aggregation (contd.)
zFundamental relationship among H, A, and M0:
M0=H㽢AzUseful properties of M0• Calculate from ordinal data• Dim. Monotone• Decomposability• dim. breakdown• sub-group decomposition

DatazThe National Survey of Family Income and Expenditures• The Japan’s Ministry of Internal Affairs and Communications• Conducted by every five years• The unit of the survey is households in the whole area of JapanzSurvey Years: 1989, 1994, 1999, and 2004
• The 2009 and 2014 surveys are not available

z2 or more persons householdz No items on health dim. (e.g. child mortality) andeducational dim. (e.g. years of schooling )Dimensions, Indicators,Cutoffs, and Weights
Dimensions

Indicators

Deprived if:

Weights

Equivalent nondurable
consumption

One half ofmedian nondurable
consumption

1/3

Consumption

WealthDwelling
Environment

1/3
Amenities

10 items(1/6)

Savings

One million yen(1/6)

Living space

Minimum living
space

1/3

Data Cleaning

Median equivalent non-durable
consumption

Equivalent savings:
median and 25 percentile

The MPI for Japan

zThe M0 value for the entire Japan decreases, but thedegree of intertemporal changes in the value have become
smaller through time.
эWhy the M0 decrease?
zAs a simple explanation for this, improvements for bothamenities and dwelling environment (see Fig. 3, the righttwo panels) dominates worse-off for consumption andsavings (shown in Fig. 3, the left two panels) .

M0 measures by household types

z The MPI values for single and two parents household are
higher than the national level for every survey year.
zThe two types of households are always the mostvulnerable ones from a multidimensional perspective.

Simple statistical test on
intertemporal changes

zDuring 1999 through 2004, we find a sharp contrast between changes
in H and in A. Namely, all changes in H are statistically significant
whereas these in A are not.
zFrom the statistical test, almost all changes in both M0 and H are
statistically significant and decreases in M0 are mainly due to decreases
in H.
zOn the other hand, we also find that almost all changes in A are notstatistically significant during the periods between 1994 and 2004 whilethese are significant during the first five years.

zThis might suggest that seriousness of poverty among the poor
became stable around mid-1990s

Summing up
zGiven the MPI designed in the paper, the M0 value for thenational level decreases, but the degree of intertemporalchanges in the value have become smaller through timeэIt seems that this finding perhaps is not consistent withthe result of the government official reports

Summing up (contd.)zThe MPI values for single and two parents household arestill high compared to the national level across every surveyyear.
эFrom a multidimensional perspective, the two types ofhouseholds are always the most vulnerable ones.
zDecreases in M0 are mainly due to decreases in the H. On
the other hand, the A has became stable around mid-1990sacross almost all subgroup including the entire Japan.

Future researches
zRobustness test
zCalculate multidimensional child poverty rates

zWhy differences between unidimensional monetary
poverty and multidimensional poverty occur?
→ Comparing monetary and multidimensional poverty inJapan.

Thanks for your attention!

mazyama@eco.u-toyama.ac.jp