Poverty can be many different things. It can be different things to different people in different countries or circumstances. It can mean one thing for people in Africa and another for people in the favelas in Rio, and still another for those in the inner-cities in the U.S. It’s probably different for men, women and children. It can be absolute deprivation or relative poverty (i.e. inequality). It can be insufficient income or insufficient consumption. It can be a lack of one thing or another. For some people it means inadequate healthcare, for others it means insufficient water. It can be physical suffering or the stress inherent in insecurity. It can be malnutrition or a lack of self-esteem. It can be illiteracy or child mortality. Etc.
Most poverty measurement systems try to keep it simple. The most common systems just measure income. Poverty is then insufficient income (typically below $1-a-day, corrected for purchasing power; this measures the number of people incapable of buying a basic basket of commodities). That makes sense, because without sufficient income, you’re likely to experience child mortality, illiteracy, malnutrition, inequality, water shortages, stress, insecurity and all the other nasty things that come with poverty.
However, it is important to know those details of poverty. Two people who both have an income of less than one dollar a day, may experience very different consequences: one may be deprived in lots of areas, the other one maybe in just a few. One may lack good health, may be starving and may be illiterate. The other one may just be illiterate. If we want to help people, it’s important to know what the exact nature of their problem is. Which we don’t if we just focus on how much their income is.
That is why some researchers at the Oxford Poverty and Human Development Initiative at the University of Oxford have tried to come up with a so-called Multidimensional Poverty Index (MPI).
The index seeks to build up a picture of the prevalence of poverty based on the fraction of households who lack certain basic things. Some of these are material. Does a family home have a dirt or dung floor? Does it lack a decent toilet? Must members of the household travel more than 30 minutes on foot to get clean water to drink? Do they live without electricity? Others relate to education, such as whether any school-age children are not enrolled or whether nobody in the family has finished primary school. Still others concern health, such as whether any member of a household is malnourished. A household is counted as poor if it is deprived on over 30% of the ten indicators used. Researchers can then calculate the percentage of people in each country who are “multidimensionally poor”. (source)
Such a multidimensional approach has the advantage of identifying which specific aspect(s) of poverty is/are most common in certain areas or among certain groups of people. It shows how people are poor, and what contributes most to poverty in a specific place and among a specific group. This will obviously greatly enhance response capacity. Rather than just trying to generally increase income, we can target our efforts more specifically: in one area or among one group of people we know that we should focus on nutrition; elsewhere we know that we should focus on literacy for instance. The MPI also shows us how different aspects of poverty overlap: for example, how many people who are illiterate also have health problems?
If 30% of people are malnourished and 30% of children are out of school, it would be useful to know if these deprivations affect the same families or different ones. (source)
The approach also helps us to distinguish between deprivation and choice. People may actually prefer mud floors to concrete floors in some places, and don’t consider having a mud floor as a form of deprivation. It also helps to identify the depth of poverty: deprivation along a wide spectrum of indicators means that poverty is deeper.
Unsurprisingly, the results of the MPI are substantially different from traditional poverty measurements:
Also the totals are different:
About 1.7 billion people in the countries covered – a third of their entire population – live in multidimensional poverty, according to the MPI. This exceeds the 1.3 billion people, in those same countries, estimated to live on $1.25 a day or less, the more commonly accepted measure of ‘extreme’ poverty. (source)
One of the disadvantages of this new approach is the weighting of the different measures: there’s inevitably some arbitrariness involved. Is the death of a child equivalent to having a dirt floor? Worse? How much worse? More criticism of the MPI is here.
More posts on poverty measurement are here.