Conceptualization and measurement of poverty have traditionally relied on purely economic approaches, with income or consumption as the only indicator. Multidimensional approaches have increasingly been used to understand poverty, but have yet to be fully operationalized. This book uses factor analysis and structural equations modelling to develop a multidimensional framework that integrates capability and social inclusion as additional poverty indicators. The empirical relevance of this methodological contribution is demonstrated through its application in the United States and Nepal.  The proposed approach not only helps to identify different categories of the poor, but also to more accurately target resources and policies of poverty alleviation. The book will therefore be an important reference for professionals in development agencies as well as for poverty and policy researchers.