The Oxford Poverty and Human Development Initiative (OPHI) released a report on Tuesday, looking at the state of poverty in the world today. For more than a decade, the United Nations Development Program measured world poverty by its Human Poverty Index (HPI.) The HPI defined poverty as making less than $1.25 a day.
However, the HPI counted countries as one whole mass. Therefore it was unable to pinpoint different degrees of poverty within a country and locate the worst pockets. Also, it put all the importance on income, failing to consider other indicators like health and education.
The report from OPHI created a new index for counting those living in poverty around the world. The Global Multidimensional Poverty index (MPI) is designed to capture the severe deprivations that each person faces at the same time.
It reflects both the incidence of multidimensional deprivation and its intensity (how many deprivations people experience at the same time.) In order to classify a household as poor, the MPI requires that the household be deprived in multiple indicators at the same time.
The MPI identified overlapping deprivations and collected 10 needs beyond the ‘basics’ in three broad categories: nutrition and child mortality under Health; years of schooling and school attendance under Education; and cooking fuel, sanitation, water, electricity, floor and assists under Living Conditions.
The new index also allows for degrees of poverty, instead of focusing on one sole aspect.
One of the consequences of the new index is that the world is more impoverished than had been previously believed. Since the multidimensional poverty approach can be adapted using indicators and weights that make sense at the country level, it can be used as a guide to help governments tailor a poverty measure that reflects multiple local indicators and data.
Instead of 1.2 billion people living in poverty, as had been calculated under the HPI index, there are approximately 1.6 billion people.
More than half of the impoverished population in developing countries reside in South Asia, and another 29 percent live in Sub-Sahara Africa. A total of 71 percent of the poor in the MPI index live in what many consider to be middle-income countries, or countries where development and modernization in the face of globalization are in full swing, but some people are left behind.
Niger is home to the highest concentration of the multidimensionally poor, with almost 90 percent of the population lacking in MPI’s socioeconomic indicators. Most of the poor live in rural areas.
Even in light of this news, there are some bright areas. In five years, Nepal has reduced its MPI numbers from 65 percent of its population living in poverty to 44 percent. Other classically poor countries, like Rwanda, Ghana, Bangladesh and Cambodia, are also improving, both economically and in narrowing the gap between rich and poor.
Yet there are some drawbacks to the new index as well. The indicators that the MPI uses include both outputs (years of education) and inputs (cooking fuel) as well as one stock indicator, child mortality, which does not take into account how recent the death was because flow data is not available for all dimensions.
Another drawback is that the health data is relatively weak and overlooks some groups’ deprivations, especially for nutrition. In addition, under the MPI index, families must be deprived in at least six standard of living indicators to be considered poor. This system makes the MPI less sensitive to minor inaccuracies.
— Monica Newell