The Journal of Economic Inequality

, Volume 11, Issue 4, pp 495–515 | Cite as

Multidimensional indices of deprivation: the introduction of reference groups weights



The use of a multidimensional approach to deprivation has known an increasing interest in the literature. This paper builds on this literature by proposing a deprivation index that weighs different dimensions according to their perceived importance by members of alternative reference groups. We first characterize a deprivation index following this line of thought. We then apply this method to European data and show that preferences over dimensions are differentiated by reference groups. This differentiation affects the value of deprivation for each country, group and the ranking of each.


Multidimensional well-being indicator Weights Reference groups 

JEL Classifications

D63 I32 


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. 1.
    Akerlof, G., Kranton, R.: Economics and identity. Q. J. Econ. 115, 715–753 (2000)CrossRefGoogle Scholar
  2. 2.
    Alkire, S., Foster, J.E.: Counting and Multidimensional Poverty Measurement (Revised and Updated). OPHI Working Papers 32 (2009)Google Scholar
  3. 3.
    Atkinson, A., Cantillon, B., Marlier, E., Nolan, B.: Social Indicators: The EU and Social Exclusion. Oxford University Press (2002)Google Scholar
  4. 4.
    Bossert, W., Chakravarty, S., D’Ambrosio, C.: Multidimensional poverty and material deprivation with discrete data. Rev. Income Wealth (forthcoming)Google Scholar
  5. 5.
    Bossert, W., D’Ambrosio, C.: Reference groups and individual deprivation. Econ. Lett. 90, 421–426 (2006)CrossRefGoogle Scholar
  6. 6.
    Bourguignon, F., Chakravarty, S.: The measurement of multidimensional poverty. J. Econ. Inequal 1, 25–49 (2003)CrossRefGoogle Scholar
  7. 7.
    Clark, A. E., Frijters, P., Shields, M.: Relative Income, Happiness and Utility: An Explanation for the Easterlin Paradox and Other Puzzles. Discussion Papers 2840, IZA (2007)Google Scholar
  8. 8.
    Clark, A.E., Oswald, A.: Satisfaction and comparison income. J. Public Econ. 61, 359–381 (1996)CrossRefGoogle Scholar
  9. 9.
    Clark, A.E., Senik, C.: Who Compares to Whom? The Anatomy of Income Comparison in Europe. Discussion Paper 4414, IZA (2009)Google Scholar
  10. 10.
    Decancq, K., Lugo, M.: Weights in multidimensional indices of well-being: an overview. Econom. Rev. 32, 7–34 (2013)CrossRefGoogle Scholar
  11. 11.
    Duesenberry, J.S.: Income Saving and the Theory of Consumer of Consumer Behavior. Oxford University Press (1949)Google Scholar
  12. 12.
    Ferrer-i Carbonell, A.: Income and well-being: an empirical analysis of the comparison income effect. J. Public Econ. 89, 997–1019 (2005)CrossRefGoogle Scholar
  13. 13.
    Fleurbaey, M., Shokkaert, E., Decanq, K.: What Good is Happiness? Discussion Paper 17, CORE (2009)Google Scholar
  14. 14.
    Fusco, A., Guio, A., Marlier, E.: Building a material deprivation index in a multinational context: lessons from the eu experience. In: Bérenger, V., Bresson, F. (eds.) Poverty and Social Exclusion Around the Mediterranean Sea. Springer Science+Business Media, New York (2013)Google Scholar
  15. 15.
    Haisken-DeNew, J.P., Sinning, M.: Social deprivation of immigrants in germany. Rev. Income Wealth 56, 715–733 (2010)CrossRefGoogle Scholar
  16. 16.
    Hyman, H.H., Singer, E., eds.: Readings in Reference Group Theory and Research. Free Press, New York; Collier-Macmillan Limited, London (1968)Google Scholar
  17. 17.
    Jackson, M.: Social and Economic Networks. Princeton University Press (2008)Google Scholar
  18. 18.
    Kapteyn, A.: A Theory of Preference Formation. PhD thesis, Leyden University, Leyden (1977)Google Scholar
  19. 19.
    Kelley, H.H.: Two functions of reference groups. In: Hyman, H., Singer, E. (eds.) Readings in Reference Group Theory and Research, pp. 77–83. Free Press, New York; Collier-Macmillan Limited, London (1968)Google Scholar
  20. 20.
    McPherson, M., Smith-Lovin, L., Cook, J.M.: Birds of a feather: homophily in social networks. Annu. Rev. Sociology 27, 415–444 (2001)CrossRefGoogle Scholar
  21. 21.
    Nolan, B., Whelan, C.: Using non-monetary deprivation indicators to analyze poverty and social exclusion: lessons from Europe? J. Policy Anal. Manag. 29, 305–325 (2010)CrossRefGoogle Scholar
  22. 22.
    Ramos, X., Silber, J.: On the application of efficiency analysis to the study of the dimensions of human development. Rev. Income Wealth 51, 285–309 (2005)CrossRefGoogle Scholar
  23. 23.
    Runciman, W.: Relative Deprivation and Social Justice. Routledge, London (1966)Google Scholar
  24. 24.
    Shokkaert, E.: Capabilities and satisfaction with life. J. Hum. Dev. 8, 415–430 (2007)CrossRefGoogle Scholar
  25. 25.
    Silber, J., Verme, P.: Distributional Change, Reference Groups and the Measurement of Relative Deprivation. IRISS Working Papers 2009-13 (2009)Google Scholar
  26. 26.
    TNS: Poverty and Social Exclusion. Report on the Special Eurobarometer 279/Wave 67.1, European Commission (2007)Google Scholar
  27. 27.
    Tsakloglou, P., Papadopoulos, F.: Identifying population groups at high risk of social exclusion. In: Muffels, R.P.T., Mayes, D. (eds.) Social Exclusion in European Welfare States, pp. 135–169. Edward Elgar, Cheltenham (2002)Google Scholar
  28. 28.
    Van Praag, B.M.S., Frijters, P.: The measurement of welfare and well-being: the Leyden approach. In: Kahneman, D., Diener, E., Schwarz, N. (eds.) Well-Being: The Foundations of Hedonic Psychology, pp. 413–433. Russell Sage, New York (1999)Google Scholar
  29. 29.
    Van Praag, B.M.S., Kapteyn, A., Van Herwaarden, F.: The definition and measurement of social reference spaces. Neth. J. Sociol. 15, 13–25 (1979)CrossRefGoogle Scholar
  30. 30.
    Vega-Redondo, F.: Complex Social Networks. Cambridge University Press (2006)Google Scholar
  31. 31.
    Whelan, C., Layte, B., Nolan, B.: Income, deprivation and economic strain: an analysis of the European community household panel. Eur. Sociol. Rev. 17, 357–372 (2001)CrossRefGoogle Scholar
  32. 32.
    Wilkinson, R.: Mind the Gap: Hierarchies, Health and Human Evolution. Weidenfeld and Nicholson, London (2000)Google Scholar
  33. 33.
    Woittiez, I., Kapteyn, A.: Social interactions and habit formation in a model of female labour supply. J. Public Econ. 70, 185–205 (1998)CrossRefGoogle Scholar
  34. 34.
    Yitzhaki, S.: Relative deprivation and the gini coefficient. Q. J. Econ. 93, 321–324 (1979)CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media, LLC. 2012

Authors and Affiliations

  1. 1.CEPS/INSTEADEsch-sur-AlzetteLuxembourg

Personalised recommendations