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Comparing Dynamics of Multidimensional and Consumption Based Poverty in Ethiopia (Inglês)

Poverty can be viewed as taking many different forms, ranging widely over a set of monetary (consumption or income) and nonmonetary dimensions (health and education). Recent literature documents that people who are identified as poor in the consumption space are often different from those who are multidimensionally poor (MDP). However, less is known about whether the dynamics of MDP are similar to the dynamics of a relative consumption-based measure of poverty. Using two waves of panel data from the Ethiopia socioeconomic survey (ESS), the authors explore the correlation between monetary and nonmonetary measures of poverty and wellbeing in the cross-section and dynamically in rural and small-town Ethiopia between 2012 and 2014. Until more is learned about precisely what each of these measures is picking up, the analysis indicates that a policymaker can be missing important changes in wellbeing by focusing only on monetary or non-monetary measures of wellbeing or poverty. Until further evidence provides more understanding of what each of these indicators is capturing, both should be tracked.

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