Hybrid measures of multidimensional poverty

In this paper, we propose a hybrid Watts-MPI multidimensional poverty measure that combines the multidimensional Watts poverty index (MWPI), which can accommodate continuous poverty dimensions, with the multidimensional poverty index (MPI), which can accommodate binary poverty dimensions. Unlike the stand-alone MPI that entails total loss of dimension-specific information on both poverty intensity with respect to shortfall and inequality, the proposed hybrid Watts-MPI measure entails only partial loss of such information since poverty intensity and inequality estimates can still be obtained for the continuous poverty dimensions included in the hybrid measure. The hybrid Watts-MPI also specializes to the stand-alone MWPI and MPI when all the poverty dimensions are continuous and binary, respectively. Furthermore, formation of the hybrid Watts-MPI does not entail loss of normative properties by either the constituent MWPI or MPI. The seemingly unrelated regression approach to the estimation of the hybrid Watts-MPI is described and an empirical example demonstrating its efficacy is provided.