A Multidimensional Poverty Index Based on the AROPE Index

Social exclusion prevents certain groups and individuals from fully participating in the economic, social, cultural, and political life of their communities. This exclusion can stem from various factors, including poverty, lack of education, discrimination, unemployment, limited access to basic services, and a lack of opportunities. To address this issue, governments and organizations implement policies and programs aimed at reducing poverty and improving household well-being. Measuring household poverty is crucial for designing and evaluating effective policies. This paper introduces a multidimensional poverty family index based on the AROPE index, which considers income, material deprivation, energy access, and employment status. Then, a household is classified as poor if it experiences deprivation in any of these four dimensions. Additionally, the framework allows for decomposition into these four sources of poverty, enabling more targeted policy interventions. Finally, we apply this measure to European countries to analyze the changes of multidimensional poverty in 2018, 2020, and 2022.