Multidimensional Poverty Index

Multidimensional Poverty Index
Name	Multidimensional Poverty Index
Abbreviation	MPI
Publisher	United Nations Development Programme
Launch date	2010
Related	Human Development Index

Multidimensional Poverty Index. The Multidimensional Poverty Index is a global metric for assessing acute poverty, developed by the Oxford Poverty and Human Development Initiative and published by the United Nations Development Programme in its annual Human Development Report. It moves beyond traditional income poverty measures by capturing the simultaneous deprivations that people face across health, education, and living standards. The index is used to inform policy and track progress toward goals like the Sustainable Development Goals.

Definition and purpose

The index defines a person as multidimensionally poor if they are deprived in at least one third of its weighted indicators. Its primary purpose is to provide a more comprehensive picture of poverty than monetary measures alone, revealing its intensity and composition. This allows policymakers in nations like India and Mexico to design targeted interventions. The development of the index was significantly influenced by the work of economists Sabina Alkire and James Foster.

Dimensions and indicators

The index is structured around three core dimensions: health, education, and standard of living. These are broken down into ten specific indicators, including nutrition, child mortality, years of schooling, school attendance, cooking fuel, sanitation, drinking water, electricity, housing, and assets. The selection and weighting of these indicators were informed by methodologies like the Demographic and Health Surveys and international standards such as those from the World Health Organization. Each dimension is equally weighted, with indicators within them also carrying specific weights.

Calculation methodology

Calculation involves identifying deprivation for each household across all indicators using data from sources like the Multiple Indicator Cluster Surveys. A deprivation score is calculated by summing the weighted deprivations; a household is identified as poor if this score meets or exceeds the poverty cutoff. The final index value is the product of the incidence of poverty (H) and its average intensity (A), a formula known as the Alkire-Foster method. This methodology allows for disaggregation by region, ethnic group, or other categories, as seen in analyses by the World Bank.

Global and national applications

Globally, the index is featured in the Human Development Report and used to monitor the Sustainable Development Goals, particularly SDG 1. Countries such as Colombia, Chile, and Pakistan have adopted national versions to guide social policy. In Mexico, the official poverty measurement incorporates a multidimensional approach. The Government of India has used similar multidimensional assessments in its planning, while organizations like the European Union and OPHI support its application in various contexts including Sub-Saharan Africa and Latin America.

Criticisms and limitations

Critics argue the selection and weighting of indicators can be arbitrary and may not reflect local contexts, a point raised by scholars like Amartya Sen. Data constraints, relying on surveys like the Living Standards Measurement Study, can affect timeliness and comparability across countries. Some economists contend it may overlook the role of economic growth and income dynamics. Furthermore, the index does not capture aspects like social exclusion, violence, or environmental quality, which are addressed in frameworks like the Social Progress Index.

Comparison with other poverty measures

Unlike the World Bank's international poverty line, which is a purely monetary measure, this index captures overlapping non-monetary deprivations. It is complementary to the Human Development Index, which measures achievement, whereas this index measures deprivation. Compared to the Gini coefficient, which measures income inequality, this index focuses on absolute deprivations in specific dimensions. Other composite indices, such as the Inequality-adjusted Human Development Index or the Happy Planet Index, incorporate different sets of well-being and sustainability factors.

Category:Human development