A one minute guide to the Multidimensional Poverty Index

(Compiled and adapted from http://www.ophi.org.uk/policy/multidimensional-poverty-index/)[1]

Introduction

The MPI is an index of acute multidimensional poverty. It reflects deprivations in very rudimentary services and core human functioning for people across 104 countries. Although deeply constrained by data limitations, MPI reveals a different pattern of poverty than income poverty, as it illuminates a different set of deprivations. The MPI has three dimensions: health, education, and standard of living. These are measured using ten indicators. Poor households are identified and an aggregate measure constructed using the methodology proposed by Alkire and Foster. Each dimension and each indicator within a dimension is equally weighted.

The indicators

1        Education (each indicator is weighted equally at 1/6 )

1.1   Years of Schooling: deprived if no household member has completed five years of schooling

1.2   Child Enrolment: deprived if any school-aged child is not attending school in years 1 to 8

2        Health (each indicator is weighted equally at 1/6)

2.1   Child Mortality: deprived if any child has died in the family

2.2   Nutrition: deprived if any adult or child for whom there is nutritional information is malnourished

3        Standard of Living (each indicator is weighted equally at 1/18)

3.1   Electricity: deprived if the household has no electricity

3.2   Drinking water: deprived if the household does not have access to clean drinking water or clean water is more than 30 minutes walk from home (MDG Definition)

3.3   Sanitation: deprived if they do not have an improved toilet or if their toilet is shared (MDG Definition)

3.4   Flooring: deprived if the household has dirt, sand or dung floor

3.5   Cooking Fuel: deprived if they cook with wood, charcoal or dung

3.6   Assets: deprived if the household does not own more than one of: radio, TV, telephone, bike, or motorbike

Who is multi-dimensionally poor

A household is identified as multi-dimensionally poor if, and only if, it is deprived in some combination of indicators whose weighted sum exceeds 30% of deprivations.  To know if a household is multi-dimensionally poor, for each of the above indicators, add 1/6 for health and education or 1/18 for standard of living for a household. If the total is 3/10 (0.3) or more, then that household is classified as multi-dimensionally poor.

Half of the world’s poor as measured by the MPI live in South Asia (51%, 844 million) and one quarter in Africa (28%, 458 million). Niger has the greatest intensity and incidence of poverty in any country, with 93 per cent of the population classified as poor in MPI terms.

The advantage

The MPI reflects both the incidence of poverty – the proportion of the population that is multi-dimensionally poor (H, households) – and the average intensity (A) of their deprivation – the average proportion of indicators in which they are deprived. The MPI is calculated by multiplying the incidence of poverty by the average intensity across the poor (HxA).

The MPI reveals the combination of deprivations suffered by a household at the same time in addition to the intensity. It reveals where exactly the deprivations cluster, making focussed intervention possible. For instance, in a community, they may be quite literate, yet their standard of living might be poor (or vice versa). It enables policy and programmes to be focused. The MPI also reveals great variations within countries.

MPI and India

Despite strong economic growth, MPI analysis reveals the persistence of acute poverty in India. There are more MPI poor in eight Indian states (421 million in Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh, and West Bengal) than in the 26 poorest African countries combined (410 million).

The following table shows the multidimensional poverty rate (MPI) and its two components for India. It reveals that 81% are multi-dimensionally poor in Bihar. Poverty in Bihar and Jharkand is most intense—poor people are deprived in 60% of the MPI’s weighted indicators. The largest number of poor people (134.7 million, 21%) of India’s poor live in Uttar Pradesh. West Bengal has the third largest number of poor.  Multidimensional poverty is lowest for Kerala. The top five states have only 4.5% of the poor. The five poorest states have more than 50% of the poor.

 

Within this, there are variations. Multidimensional poverty is highest (81.4%) among Scheduled Tribes, followed by Scheduled Castes (65.8%), Other Backward Classes (58.3%) and others (33.3%). 

The MPI figures (55%) are in contrast to the the World Bank(42%),[3] N C Saxena(50%) Arjun Sengupta(41%),[4] Tendulkar(37%)[5] and the Planning Commission (27.5%) estimates.

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