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.