Multidimensional poverty measurement with individual preferences�

We propose a new class of multidimensional poverty indices. Aggrega-
tion of the di¤erent dimensions relies on individual preferences. The
Pareto principle is, therefore, satis…ed among the poor. The indices
add up individual measures of poverty that are computed as a con-
vex transform of the fraction of the poverty line vector to which the
agent is indi¤erent. The axiomatic characterization of this class re-
tains the usual axioms of focus and subgroup consistency and it intro-
duces additional principles for interpersonal poverty comparisons and
for inequality aversion among the poor. We illustrate our approach
with Russian survey data between 1995 and 2005. We …nd that tak-
ing preferences into account leads to considerable di¤erences in the
identi…cation of the poor compared to standard poverty measures.