When it comes to creating policies that aim to lift people out of poverty, it is often only monetary measures, such as income or a country’s per capita GDP, that are considered. In the last few years, however, members of the Oxford Poverty and Human Development Initiative (OPHI) and the U.N. Development Program (UNDP) created a Multidimensional Poverty Index (MPI) that identifies broader poverty “deprivations,” such as health, education, shelter and access to clean water among others, as a way to help policy makers create more effective poverty reduction programs.
Using micro-data collected from household surveys, MPI is a complement data set for already established income-based poverty measures. It was published for the first time in the 2010 UNDP Human Development Report.
In recent data, OPHI showed that 1.6 billion people are considered to be “MPI-poor,” with 85 percent from rural areas where development continues to be a work in progress.
MPI factors are drawn from basic standard of living indices and overlap with the already established Millennium Development Goals (MDG) including: nutrition (MDG 1,) child mortality (MDG 4,) access to drinking water (MDG 7,) access to sanitation facilities (MDG 7) and access to improved cooking oils (MDG 9). MPI classifies a person as multi-dimensionally poor when a household is deprived of at least six standard of living indicators or of three standard of living indicators and one health or education indicator.
By including other factors besides income, the MPI shows where the poor are deprived most in order to reveal interconnections that can help policymakers create and implement more effective poverty programs within their populations.
Talking about why the MPI was created, Dr. Sabina Alkire, OPHI Director and one of the creators of the Alkire Foster method, stated that “Poverty and well-being are multidimensional concepts that involve all aspects of a person’s experience of life.” Using factors beyond just income measures allows for a more nuanced understanding of a country’s population’s needs.
The first country to use the MPI measure was Mexico in 2009, which used factors such as health, housing, education, access to food and income to formulate a national poverty initiative.
In 2011 Colombia became the first country to use the Alkire Foster method, a method developed by OPHI, that assesses poverty in five dimensions: household education, childhood and youth conditions, access to household utilities and living conditions, child labor conditions and labor and health. Using this as a base to launch a national poverty reduction policy, the Colombian government set a goal to reduce multidimensional poverty from 35 percent of the entire population in 2008 to 22 percent in 2014.
As leaders begin to formulate the post-2015 MDG agenda, the MPI indices should be included in the data sets in order to help nations and world leaders understand a more complete picture of poverty throughout the world.