Health Shocks, Coping Strategies, and Multidimensional Poverty: Insights from India

Empirical evidence suggests that health shock-induced coping strategies adopted by households to smooth consumption may adversely affect their economic vulnerability. Despite this, the relationship between such coping mechanisms and multidimensional poverty remains underexplored. This study aimed to examine the relationship between healthcare-related coping strategies and multidimensional poverty in the Indian context. Using data from the nationally representative Social Consumption: Health Survey (2017–2018), the analysis included 79,811 households. Multidimensional poverty was measured using the Alkire–Foster methodology. Propensity score matching (PSM) was employed to estimate the average treatment effect on the treated (ATT), while a generalized ordered logit model was used to examine the likelihood of belonging to different levels of multidimensional poverty. The findings revealed substantial heterogeneity across coping strategies: borrowing and asset sales were positively associated with multidimensional poverty, whereas contributions from relatives/friends and other sources were negatively associated. Insurance coverage and higher consumption expenditure were associated with a lower likelihood of multidimensional poverty, while households from socially marginalised groups were more likely to experience multidimensional poverty. These findings highlight the importance of strengthening financial protection to reduce reliance on coping strategies associated with higher levels of multidimensional poverty.