Multidimensional Poverty Measurement in Segregated Cities

Abstract

This paper illustrates the insights that can be gained from using a multidimensional poverty measurement method based on the capability approach to analyse the scale, characteristics, and spatial distribution of poverty in segregated cities. We assess the poverty gaps between formal and informal neighbourhoods and across districts, compare the results with income-based poverty estimates, and analyse the dimensional composition of poverty and disparities across population subgroups. The results show a weaker correlation between multidimensional and income-based measures and less overlap in terms of who is identified as poor in informal settlements than in the rest of the city. After adjusting for underrepresentation of the slum population in the household survey, informal settlements account for 10% of the city's population but nearly half of the multidimensionally poor. The results highlight the need to design poverty reduction policies that target informal neighbourhoods.