The Oxford Poverty and Human Development Initiative (OPHI) of Oxford University and the Human Development Report Office of the United Nations Development Programme (UNDP) launched in July 2010 a new poverty measure that gives a “multidimensional” picture of people living in poverty which its creators say could help target development resources more effectively. The MPI supplants the Human Poverty Index, which had been included in the annual Human Development Reports since 1997. Research findings from the Multidimensional Poverty Index were made available at a policy forum in London and on line on the website of OPHI.
Like development, poverty is multidimensional — but this is traditionally ignored by headline figures. The Multidimensional Poverty Index (MPI), published for the first time in the 2010 Report, complements money-based measures by considering multiple deprivations and their overlap. The index identifies deprivations across the same three dimensions as the HDI and shows the number of people who are poor (suffering a given number of deprivations) and the number of deprivations with which poor households typically contend. It can be deconstructed by region, ethnicity and other groupings as well as by dimension, making it an apt tool for policymakers.
About 1.75 billion people in the 104 countries covered by the MPI—a third of their population — live in multidimensional poverty — that is, with at least 30 percent of the indicators reflecting acute deprivation in health, education and standard of living. This exceeds the estimated 1.44 billion people in those countries who live on $1.25 a day or less (though it is below the share who live on $2 or less).
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The Multidimensional Poverty Index (MPI) is a new measure designed to capture the severe deprivations that people face at the same time. The MPI reflects both the incidence of multidimensional deprivation, and its intensity – how many deprivations people experience at the same time. It can be used to create a comprehensive picture of people living in poverty, and permits comparisons both across countries, regions and the world and within countries by ethnic group, urban/rural location, as well as other key household and community characteristics. The MPI builds on recent advances in theory and data to present the first global measure of its kind, and offers a valuable complement to traditional income-based poverty measures. The 2010 Human Development Report (HDR), being launched on November 4, presents estimates for 104 countries with a combined population of 5.2 billion (92 percent of the population in developing countries). About 1.7 billion people in the countries covered – a third of their entire population - live in multidimensional poverty.
The MPI will replace the HPI, which had been published since 1997. Pioneering in its day, the HPI used country averages to reflect aggregate deprivations in health, education, and standard of living. It could not identify specific individuals, households or larger groups of people as jointly deprived. The MPI addresses this shortcoming by capturing how many people experience overlapping deprivations (incidence) and how many deprivations they face on average (intensity). The MPI can be broken down by indicator to show how the composition of multidimensional poverty changes for different regions, ethnic groups and so on—with useful implications for policy.
As the upcoming HDR states, the MPI identifies overlapping deprivations at the household level across the same three dimensions as the Human Development Index (living standards, health, and education) and shows the average number of poor people and deprivations with which poor households contend. For details see Alkire and Santos 2010.
One deprivation alone may not represent poverty. The MPI requires a household to be deprived in multiple indicators at the same time. A person is multidimensionally poor if the weighted indicators in which he or she is deprived add up to at least 30 percent.
We could not include income due to data constraints. Income poverty data come from different surveys, and these surveys often do not have information on health and nutrition. For most countries we are not able to identify whether the same people are income poor and also deprived in all the MPI indicators so could not include income.
We could not include empowerment due to data constraints. The DHS surveys collect data on womens’ empowerment for some countries, but not every DHS survey includes empowerment, and the other surveys do not have these data. Data on men’s empowerment or political freedom are missing.
The MPI relies on three main datasets that are publicly available and comparable for most developing countries: the Demographic and Health Survey (DHS), the Multiple Indicators Cluster Survey (MICS), and the World Health Survey (WHS).
We could not include other countries due to data constraints. Comparable data on each of the indicators were not available for other developing nations.
The MPI relies on the most recent and reliable data available since 2000. However surveys are taken in different years, and some countries do not have recent data. Sixty four countries’ data comes from 2005 or later; thirty countries are from 2003 or 2004, and ten countries from 2000-2002. The difference in dates limits direct cross country comparisons, as circumstances may have improved, or deteriorated, in the intervening years.
The MPI complements income poverty measures. It measures various deprivations directly. In practice, although there is a clear overall relationship between MPI and $1.25/day poverty, the estimates do differ for many countries. This is a topic for further research, but some possibilities can include public services, as well as different abilities to convert income into outcomes such as good nutrition.
The MPI, like the $1.25/day line, is a globally comparable measure of poverty. It measures acute multidimensional poverty, and only includes indicators that are available for many countries. National poverty measures are typically monetary measures, and thus capture something different. The fact that there are differences does not mean that the national poverty number, or the MPI headcount is wrong – these simply measure different conceptions of poverty. At the same time, just as national poverty measures, in contrast, are designed to reflect the national situation more accurately and often differ in very useful ways from the $1.25 measure, some countries may wish to build a national multidimensional poverty index that is tailored to their context, to complement this international MPI.
No. The MPI is intended to complement monetary measures of poverty, including $1.25 a day estimates. The relationship between these measures, as well as their policy implications and methodological improvement, are priorities for further research.
The MPI methodology shows aspects in which the poor are deprived and help to reveal the interconnections among those deprivations. This enables policymakers to target resources and design policies more effectively. This is especially useful where the MPI reveals areas or groups characterized by severe deprivation. Examples where this has been done in practice already include Mexico’s poverty targeting program, as described in the upcoming HDR.
The MPI reflects the severe deprivations that people face at the same time. Because it was designed to internationally compare across developing nations, it is most relevant to lesser developed countries. We have described the MPI as a measure of ‘acute’ poverty to avoid confusion with the World Bank’s measure of ‘extreme’ poverty that captures those living on less than $1.25 a day.
The MPI constitutes a family or set of poverty measures. These measures can be unpacked to show the composition of poverty both across countries, regions and the world and within countries by ethnic group, urban/rural location, as well as other key household and community characteristics. This is why OPHI describes the MPI as a high resolution lens on poverty: it can be used as an analytical tool to identify the most prevailing deprivations. The MPI measures are explained below:
Incidence of poverty: the proportion of people who are poor according to the MPI (those who are deprived in at least 30% of the weighted indicators).
Average intensity of poverty: the average number of deprivations people experience at the same time.
MPI value: The MPI value summarises information on multiple deprivations into a single number. It is calculated by multiplying the incidence of poverty by the average intensity of poverty.
The MPI indicators are drawn from the MDGs as far as the available internationally comparable data allow. The ten indicators of the MPI are identical, or relate, to MDG indicators: nutrition (MDG 1), child mortality (MDG 4), access to drinking water (MDG 7), access to sanitation facility (MDG 7) and use of an improved source of cooking fuel (MDG 9. The overall MPI can be broken down into its constituent parts, revealing the overlapping needs of families and communities across a range of indicators which so often have been presented in isolation. This helps policymakers to see where challenges lie and what needs to be addressed.
The MPI has some drawbacks, due mainly to data constraints. First, the indicators include both outputs (such as years of schooling) and inputs (such as cooking fuel) as well as one stock indicator (child mortality, which could reflect a death that was recent or long ago), because flow data are not available for all dimensions. Second, the health data are relatively weak and overlook some groups’ deprivations especially for nutrition, though the patterns that emerge are plausible and familiar. Third, in some cases careful judgments were needed to address missing data. But to be considered multidimensionally poor, households must be deprived in at least six standard of living indicators or in three standard of living indicators and one health or education indicator. This requirement makes the MPI less sensitive to minor inaccuracies. Fourth, as is well known, intra-household inequalities may be severe, but these could not be reflected. Fifth, while the MPI goes well beyond a headcount to include the intensity of poverty experienced, it does not measure inequality among the poor, although decompositions by group can be used to reveal group-based inequalities. Finally, the estimates presented here are based on publicly available data and cover various years between 2000 and 2008, which limits direct cross-country comparability.
The multidimensional poverty approach can be adapted using indicators and weights that make sense at the country level to create tailored national poverty measures. The MPI can be useful as a guide to helping governments tailor a poverty measure that reflects multiple local indicators and data. In 2009 Mexico, became the first country to adopt a multidimensional poverty measure reflecting multiple deprivations on the household level.
Yes. The global MPI estimates are constrained by need for comparability. National teams should use the indicators and weights that make sense. At the country level, however, the multidimensional poverty approach to assessing deprivations at the household level can be tailored using country-specific data and indicators to provide a richer picture of poverty at the country level.
Yes. The MPI methodology can and should be modified to generate national Multidimensional Poverty Measures that reflect local cultural, economic, climatic and other factors. The international MPI was devised as an analytical tool to compare acute poverty across nations.
We estimated the MPI over time and conducted trend analysis for a handful of countries for which suitable data are available for. For details see page 51 of Alkire and Santos 2010.
The effects of shocks are difficult to capture in any poverty measure. Because the standard survey data used to estimate the global measure are collected only every three years, the ability to detect changes is limited by the available data fed. The MPI will reflect the impacts of shocks as far as these cause children to leave primary education or to become malnourished, for example. If more frequent data is available at the country or local level, this can be used to seek to capture the effects of larger scale economic and other shocks.
The MPI is one of three new experimental series introduced in 2010, alongside the Inequality-adjusted Human Development Index and the Gender Inequality Index. It will be revised and improved in light of feedback and data availablility. Each annual report is expected to update estimates as data allows.
This is presently under investigation.
Please do not hesitate to contact the HDRO team concerning the work undertaken for the 2010 Report. A full list of staff can be accessed here.