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Item Restricted A comparison between the income approach and the capabilities approach to poverty: does the income approach capture health, too?(2005-10) Molato, Rhea M.; Medina, Janis J.This paper explored the link between two different approaches to poverty: the income approach an the capabilities approach. In doing this, the paper utilized cross-section data among the 78 provinces of the Philippines and compared the provincial indicators of these two approaches. This study found that they strongly, though not perfectly, agree on which provinces are considered poorer than the others. It was also found that like the capabilities approach, the income approach captures the health poor. Income, an indicator of monetary poverty, is significantly correlated with health. This was established by a Two-Stage Least Squares estimation of the simultaneous equations model relating income with health. This confirms the validity of income-based poverty statistics as proxy for identifying poverty in terms of other dimensions such as health. Since the income approach is easier and less costly to operationalize than the capabilities approach, cost savings are further justified by its health content. These savings could then translate into efficient targeting. Furthermore, since income deprivation is directly related to capability deprivation, curtailment of income poverty means a corresponding improvement against poverty in terms of other dimensions.