Carlos Eduardo Velez, IADB Dic, 2006 Taller Medición de Calidad de Vida Panel / Concepto General Calidad de Vida Carlos Eduardo Velez, IADB Dic, 2006

Background in LAC Multidimensional Perspective with arbitrary agregation Unsatissfied Basic Needs (Quality of housing, dependence rate, etc.), Humand Development Index Multidimensional Perspective without agregation MDGs (highly important for awareness of brader group of policy makers and stake holders) Multidimensional Poverty Index with more structured aggregation Theory MDPI, Chrakravarty, Bourguignon, etc Applications for LAC / presented at the conference “The Many dimensions of Poverty” IPC 2005

Illlustrate Application to the Colombia Percieved well-being shows unambiguos improvement for all Colombians and for the poor.

Question-Puzzle PUZZLE: better well-being 1997-2003 despite but the worst economic recession (1998), that reversed the levels of poverty to 1988 levels. persistently high levels of violence and insecurity. but But with persistent improvements in social indicators (education, sanitation, etc.) 180 degree change of government’s security policy (since late 2002 / President Uribe)

Main concerns of Colombians in 2000: violence, employment, education According to the Latinobarometro surveys 2000 [Gaviria (2001) and Caroline Mosser (1999)] Nearly four out of every five Colombians thought that public policy priorities were either Violence (38%) Unemployment-income poverty (25%) Education (15%) (followed by corruption and low wages) Source: Velez (2002) Colombia Poverty Report, World Bank.

Question-Puzzle

Question-Puzzle

Question-Puzzle

Tri-dimensioal MDP introducing a more accurate measurement of consumption (one that includes public subsidies of social programs) gives a more consistent picture of the link between changes in well-being and the MDPI. the degree of consistency is even larger when the welfare weights of non-monetary dimensions -like education and security- are raised vis-à-vis consumption.

Conclusion The results show that parametrizing axiomatically derived MDP indices, while maintaining consistency with evidence on reported well-being of Colombian households, provides a path to derive non-arbitrary weights for the variables included, to avoid arbitrary aggregation procedures, and to reflect more accurately the impact that each dimension of poverty has on the overall wellbeing within the household.