Measuring the Multiple Dimensions of Poverty: a way forward

Measuring the Multiple Dimensions of Poverty:

a way forward

The Way Forward in Poverty Measurement Seminar

Geneva, 2-4 December 2013

OPHI – MPI TeamOPHI Research Team: Sabina Alkire (Director), James Foster (Research Fellow), John Hammock (Co-Founder and Research Associate), José Manuel Roche (coordination MPI 2011), Adriana Conconi (coordination MPI 2013), Maria Emma Santos (coordination MPI 2010), Suman Seth, Paola Ballon, Gaston Yalonetzky, Diego Zavaleta, Mauricio Apablaza

Data analysts and MPI calculation 2013: Akmal Abdurazakov, Cecilia Calderon, Iván Gonzalez De Alba, UshaKanagaratnam, Gisela Robles Aguilar, Juan Pablo Ocampo Sheen, Christian Oldiges and Ana Vaz.

Special contributions: Heidi Fletcher (preparation of the maps), Esther Kwan and Garima Sahai (research assistance and preparation of graphs), Christian Oldiges (research assistance for regional decomposition and standard error), John Hammock (new Ground Reality Check field material), Yadira Diaz (helping in map preparation).

Communication Team: Paddy Coulter (Director of Communications), Emmy Feena (Research Communications Officer), Heidi Fletcher (Web Manager), Moizza B Sarwar (Research Communications Assistant), Cameron Thibos (Design Assistant), Joanne Tomkinson.

Administrative Support: Laura O'Mahony (Project Coordinator)

OPHI prepare the MPI for publication in the UNDP Human Development Report and we are grateful to our colleagues in HDRO for their support.

Outline• Motivations to consider a

multidimensional approach for measuring poverty

• The Alkire Foster (AF) methodology Global Multidimensional Poverty Index

(MPI)

• Properties of the AF method Illustrations

• MPI 2015+ and the post-2015 development agenda

Why

MultidimensionalPoverty Measures?

Poor people’s lives can be battered by multiple deprivations that are each of independent importance.

(Amartya Sen, 1992)

What we have: Technical• Increasing data• Improving methodologies

What we need: Policy• Income poverty is important but insufficient• Growth has not been inclusive• Go beyond dazzlingly complex dashboards of

indicators• Emphasising the joint distribution across

deprivations Path ahead: Ethical and Political• Political critique of current metrics• Measures in 2010 HDR sparked interest and

debate• MPI 2015+ for the post-2015 MDGs

Motivations for moving towards multidimensional poverty measure

Increasing Data

Income Poverty is Important, but not Sufficient

(Global Monitoring Report Progress Status, 2013)

Reduction in income poverty does NOT reduce other MDG deprivations automatically.

0

16

32

48

64

80

96

112

128

144

Extreme Poverty Improved Water Primary Completion

Undernourishment Sanitation Infant Mortality

Num

ber o

f Cou

ntrie

s

Target Met Sufficient Progress Insufficient ProgressModerately Off Target Seriously Off Target Insufficient Data

Source of data: World Bank Data; computed by Suman Seth

Economic Growth is Important, but Not Always Inclusive

Indicators Year India Bangladesh Nepal

Gross National Income per Capita (in International $)

1990 860 550 510 2011 3620 1940 1260Growth (p.a.) 6.8% 5.9% 4.2%

Under-5 Mortality1990 114.2 138.8 134.62011 61.3 46.0 48.0Change -52.9 -92.8 -86.6

DPT Immunization Rate1990 70 69 432010 72 95 82Change 2 26 39

Adult Pop. with no Education

1990 51.6 55.5 65.82010 32.7 31.9 37.2Change -18.9 -23.6 -28.6

Access to Improved Sanitation (rural pop)

1990 7 34 72010 23 55 27Change 16 21 20

Source: Alkire and Seth (2013). The table is inspired by Drèze and Sen (2011), with minor additions.

Going Beyond Dazzlingly Dashboards of Indicators

Proportion of population below $1 (PPP)/day Share of women in wage employment in the non-agricultural sector Net enrolment ratio in primary education Prevalence of

underweight children under 5 years of age

Maternal mortality ratio

Prevalence of deaths associated with malaria Proportion of tuberculosis cases detected and cured under DOTS

Proportion of seats held by women in national parliament

Literacy rate of 15-24 years-old

Identifying Joint Distribution of Deprivations

deprived=1; non-deprived=0

In both cases, 25% deprived in each MDG indicator

BUT, in Case 2, one person is severely deprived

Case 1  Illiterate Undernourished No safe water Low income

Abby 1 0 0 0Jane 0 1 0 0Jon 0 0 1 0Tania 0 0 0 1

Case 2  Illiterate Undernourished No safe water Low income

Abby 0 0 0 0Jane 0 0 0 0Jon 0 0 0 0Tania 1 1 1 1

Political recognition• “MDGs did not focus enough on reaching the

very poorest” - High-Level Panel on the Post-2015 Development Agenda (2013)

Should be able to distinguish poorest from the less poor

• “Acceleration in one goal often speeds up progress in others; to meet MDGs strategically we need to see them together” - What Will It Take to Achieve the Millennium Development Goals? (2010)

Emphasis on joint distribution and synergies

• “While assessing quality-of-life requires a plurality of indicators, there are strong demands to develop a single summary measure” - Stiglitz Sen Fitoussi Commission Report (2009)

One summary index is more powerful in drawing policy attention

Value-added of a Multidimensional Approach

What can a meaningful multidimensional measure do?

• Provide an overview of multiple indicators at-a-glance

• Show progress quickly and directly (Monitoring/Evaluation)

• Inform planning and policy design• Target poor people and communities• Reflect people’s own understandings

(Flexible)• High Resolution

– zoom in for details by regions, groups, or dimensions

The Global

Multidimensional Poverty Index (MPI)

- applying Alkire Foster (AF) method

AF Method: An Overview• Identification of poor – Dual cutoffs

Deprivation cutoffs - each deprivation counts Poverty cutoff - in terms of aggregate deprivation

values• Aggregation across the poor – Adjusted FGT• Adjusted Headcount Ratio (Mο):

H: The percent of people identified as poor, the incidence of multidimensional poverty

A: The average proportion of deprivations people suffer at the same time; intensity of people’s poverty

Source: Alkire & Foster, 2011, J. of Public Economics

.

Formula: Mο = H × A

Application of the AF Method: Global MPI

1. Select dimensions 2. Select indicators, unit of analysis & weights

(Flexible)3. Set deprivation cutoffs for each indicator

(Flexible) 4. Set a poverty cutoff, (k) to identify who is

poor (Flexible)5. Calculate Adjusted Headcount Ratio (M0)

– Reflects incidence (H), intensity (A)Note: The AF methodology does not specify dimensions, indicators, weights, or cutoffs; it is flexible and can be adapted to many contexts.

(Source: Alkire, S & Santos, M.E., 2010)

One implementation of the AF Method Global MPI

3 Dimensions

10 Indicators

Years of Schooling

(1/6)

School Attendance

(1/6)Education (1/ 3)

Child Mortality

(1/6)

Nutrition

(1/6)Health (1/ 3) Standard of Living (1/ 3)

Cook

ing F

uel

Sani

tatio

n

Wat

erEl

ectri

city

Floo

r

Asse

t Own

ersh

ip

(1/ 18 Each)

Dimensions are equally weighted, and each

indicator within a dimension is equally weighted

Deprived if no household member has completed five years of schooling

Identify Who is PoorA person is multidimensionally poor

if she is deprived in 1/3 of the weighted indicators.

(censor the deprivations of the non-poor)

33.3%

39%

Properties of the

AF method-An illustration using

findings from MPI 2013

Properties of AF method: an overview

20

• Can be broken down into incidence (H) and the intensity (A)

• Is decomposable across population subgroups– Overall poverty is population-share weighted average of

subgroup poverty

• Overall poverty can be broken down by dimensions & indicators to understand their contribution

Country A:

Country B: Incidence (H) vs. Intensity (A)

50.00

55.00

60.00

65.00

70.00

75.00

50.00

51.00

52.00

53.00

54.00

55.00

56.00

57.00

58.00

59.00

60.00

0.30

0.31

0.32

0.33

0.34

0.35

0.36

0.37

0.38

0.39

0.40

0.41

0.42

Before

MultidimensionalHeadcount

(H)

Intensity of Deprivations

(A)

Multidimensional Poverty Index(MPI = H * A)

50.00

55.00

60.00

65.00

70.00

75.00

50.00

51.00

52.00

53.00

54.00

55.00

56.00

57.00

58.00

59.00

60.00

0.30

0.31

0.32

0.33

0.34

0.35

0.36

0.37

0.38

0.39

0.40

0.41

0.42

Before

MultidimensionalHeadcount

(H)

Intensityof Deprivations

(A)

Multidimensional Poverty Index(MPI = H * A)

50.00

55.00

60.00

65.00

70.00

75.00

50.00

51.00

52.00

53.00

54.00

55.00

56.00

57.00

58.00

59.00

60.00

0.30

0.31

0.32

0.33

0.34

0.35

0.36

0.37

0.38

0.39

0.40

0.41

0.42

After

Before

MultidimensionalHeadcount

(H)

Intensity of Deprivations

(A)

Multidimensional Poverty Index(MPI = H * A)

50.00

55.00

60.00

65.00

70.00

75.00

50.00

51.00

52.00

53.00

54.00

55.00

56.00

57.00

58.00

59.00

60.00

0.30

0.31

0.32

0.33

0.34

0.35

0.36

0.37

0.38

0.39

0.40

0.41

0.42

After

Before

MultidimensionalHeadcount

(H)

Intensity of Deprivations

(A)

Multidimensional Poverty Index(MPI = H * A)

Policy oriented to the poorest of the poorPoverty reduction policy (without inequaliy focus)

Source: Roche (2013)Country B reduced the intensity of

deprivation among the poor more. The final index reflects this.

Uneven Reduction in MPI across Population Subgroups:

India (1999-2006)

22-0.110 -0.090 -0.070 -0.050 -0.030 -0.010

Urban (*) [0.116]Rural (*) [0.368]

General (*) [0.229]OBC (*) [0.301]SC (*) [0.378]ST (*) [0.458]

Sikh (*) [0.115]Christian () [0.196]Hindu (*) [0.306]Muslim () [0.32]

Absolute Change (99-06) in MPI-I

State

s (Si

gnifi

canc

e) [M

PI-I

in 19

99]Religio

n

Caste

Slower progress for Scheduled Tribes (ST)

and Muslims

Source: Alkire and Seth (2013)

Dimensional Breakdown NationallyIndia (1999-2006)

23

-12.0%

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

Abso

lute C

hang

e in

CH

Rati

o

Indicator (Statistical Significance) [1999 CH Ratio]

Source: Alkire and Seth (2013)

Dimensional Breakdown in Six States

India (1999-2006)

24Source: Alkire and Seth (2013)

Distribution of Intensities among the Poor

Madagascar (2009)MPI = 0.357

H = 67%

Rwanda (2010)MPI = 0.350

H = 69%Source: Alkire , Roche &Seth (2013)

The Global MPI

2015+In the Post 2015 MDGDevelopment Agenda

Moving towards a MPI 2015+

Findings from Global MPI:

- $1.25/poverty and MPI do not move together

- MPI reduction is often faster than $1.25/day poverty

- Political incentives from MPI are more direct

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Comparing the Headcount Ratios of MPI Poor and $1.25/day Poor

Intensity 69.4% & More Intensity 50-69.4% Intensity 44.4-50% Intensity 33.3-44.4% $1.25 a day

Height of the bar: MPI Headcount RatioHeight at ‘•’ : $1.25-a-day Headcount Ratio

Source: Alkire , Roche &Seth (2013)

MPI 2015+ for the Post-2015 MDGs

(Alkire and Sumner 2013)

- To complement $1.25/day poverty

- To reflect interconnections between deprivations: how people are poor

- Emphasis on participatory discussions & expert views

- National MPI should be recognised and reported internationally

The Global Multidimensionl Poverty

Peer Network (MPPN)

Angola, Bhutan, Brazil, Chile, China, Colombia, Dominican Republic, ECLAC, Ecuador, El Salvador, Germany, India, Iraq, Malaysia, Mexico, Morocco, Mozambique, Nigeria, OECD, the Organization of Caribbean States, OPHI, Peru, Philippines, SADC, Tunisia, Uruguay and Vietnam

Launch of Global MPPN, June 2013

• Founded by OPHI with Mexico’s CONEVAL and Colombia’s DNP & financial support from BMZ

• Launched by President Santos of Colombia

• Roundtable discussion on the MPPN by Ministers

• Amartya Sen Lecture on “Discovering Women”

The MPPN Moving Forward

• Expansion of Multidimensional Poverty Index Official national poverty measures Subnational Pilots (China, Brazil)

• An Effective and Informed Voice in the Post 2015 Discussions Colombia, Mexico, Germany, OPHI and the

MPPN host a side event at the UN General Assembly 2013

• The Promotion of Joint Research and Development of Practical Tools 

•  

Summary• Emphasizes on joint distribution of

deprivations

• Decompositions by subpopulation - policy relevance

• Flexible and can be adapted to national

contexts

• MPI 2015+: comparable across countries

• National MPI and Global MPI 2015+ can be reported like national income poverty and $1.25/day

References: Alkire, S. and Santos, M.E. 2010. Acute multidimensional poverty: a new index for developing countries. OPHI Working Paper 38, Oxford Poverty and Human Development Initiative, University of Oxford. Alkire, S. and Foster, J.E. 2011. Counting and multidimensional poverty measurement. Journal of Public Economics, 95 (7-8): 476-487.Alkire, S. and Sumner, A. 2013. Multidimensional Poverty and the Post-2015 MDGs. OPHI Briefing Note. http://www.ophi.org.uk/wp-content/uploads/MPI-post-2015-MDGs-FINAL.pdf?cda6c1Alkire, S. and Seth, S. 2013. “Multidimensional Poverty Reduction in India 1999 and 2006: Slowest Progress for the Poorest Groups”, Research Brief, Oxford Poverty & Human Development Initiative, Oxford University.http://www.ophi.org.uk/wp-content/uploads/Multidimensional-Poverty-Reduction-in-India-1999-20061.pdf?3f40f1

Alkire, S. and Roche, J.M. 2013. ‘Multidimensional Poverty Index 2013’, Research Brief, Oxford Poverty & Human Development Initiative, Oxford University.http://www.ophi.org.uk/wp-content/uploads/Multidimensional-Poverty-Index-2013-Alkire-Roche-and-Seth.pdf

 Drèze J and Sen, A.K. 2011. “Putting Growth In Its Place”, Outlookindia.com Magazine, November 2011, accessed at www.outlookindia.com/article.aspx?278843 on January 11, 2013.

Weblinks:

High-Level Panel on the Post-2015 Development Agenda (2013)http://www.post2015hlp.org/the-report/Stiglitz Sen Fitoussi Commission Report (2009) http://stiglitz-sen-fitoussi.fr/documents/rapport_anglais.pdfWhat Will It Take to Achieve the Millennium Development Goals? (2010)http://www.undp.org/content/undp/en/home/librarypage/mdg/international-assessment---english-full-version.html

Thank You

More information: The Global MPI is published annually in the Human Development

Report of UNDPWorking Papers and resources available on www.ophi.org.uk