Tracking Poverty Reduction in Bhutan: Income Deprivation Alongside Deprivation in Other Sources of Happiness

• Published in: Social indicators research 2013-06, Vol.112 (2), p.259-290
• Main Author: Santos, Maria Emma
• Format: Article
• Language: English
• Subjects: Access to Education; Antipoverty Programs; Bhutan; Comparative Analysis; Consumer spending; Deprivation; Developing Nations; Disadvantaged Environment; Economic Factors; Economic growth; Economic indicators; Economically Disadvantaged; Education; Educational Attainment; Electricity; Error rates; Expenditure; Expenditures; Foreign Countries; GDP; Gross Domestic Product; Growth rate; Happiness; Human Development Index; Human Geography; Income; Land ownership; Landowners; Level of education; Longitudinal Studies; Low Income Groups; Measurement; Microeconomics; Monitoring; National Surveys; Ownership; Poverty; Poverty alleviation; Poverty rates; Primary Education; Psychological Patterns; Public Health; Quality of Life; Quality of Life Research; Research Methodology; Rural Areas; Sanitation; Social Indicators; Social Sciences; Socioeconomic Influences; Sociology; Sociometric Techniques; Spiritual Development; Standard of living; Statistical Analysis; Sustainable Development; Term weighting; Water; Water deprivation; Water Supply
• ISSN: 0303-8300; 1573-0921
• DOI: 10.1007/s11205-013-0248-4

This paper analyses poverty reduction in Bhutan between two points in time—2003 and 2007—from a multidimensional perspective. The measures estimated include consumption expenditure as well as other indicators which are directly (when possible) or indirectly associated to valuable functionings, namely, health, education, access to electricity, safe water, improved sanitation, enough room per person in dwelling, access to roads and land ownership. Interestingly, most of these indicators have been identified as sources of happiness in the 2007 Gross National Happiness Survey. Twelve different measures are estimated with a variety of values for the different parameters involved for robustness analysis. Also, estimates are bootstrapped creating 95 % confidence intervals. We find that over the study period there was an unambiguous reduction in multidimensional poverty regardless of the indicators' weights, deprivation cutoffs and identification criterion of the poor. This reduction was mainly led by a reduction in the proportion of the poor which was accompanied by a reduction in the intensity of poverty among those who were less intensively poor, although not among those who were more intensively poor. Rather than accomplishing this poverty reduction by improving achievements in one or two indicators, there were significant reductions in several deprivations, especially in access to roads, electricity, water, sanitation, and education. We also find that when income alone is used to target the poor, inclusion errors are marginal but exclusion errors are sizeable. Despite Bhutan's significant progress, challenges remain as poverty is still high in rural areas. A multidimensional measure in the lines proposed in this paper can prove useful for monitoring poverty reduction, prioritizing groups and evaluating upon investment.