Multidimensional Poverty Index

The Multidimensional Poverty Index (MPI) was developed in 2010 by Oxford Poverty & Human Development Initiative and the United Nations Development Programme.^[1]

History

The MPI was created for the 20th Anniversary edition of the UNDP Human Development Report and uses different factors to determine poverty beyond income-based lists. It uses a range of deprivations that afflict an individual's life. "The measure assesses the nature and intensity of poverty at the individual level in education, health outcomes, and standard of living."^[2]

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.

Calculation of the index

Calculation

The MPI is calculated as follows:^[3]

$MPI = H \times A$

H: Percentage of people who are MPI poor (incidence of poverty)
A: Average intensity of MPI poverty across the poor (%)

Indicators used

The following ten indicators are used to calculated the MPI:^[4]

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

1. Years of Schooling: deprived if no household member has completed five years of schooling
2. Child Enrolment: deprived if any school-aged child is not attending school in years 1 to 8

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

3. Child mortality: deprived if any child has died in the family
4. Nutrition: deprived if any adult or child for whom there is nutritional information is malnourished

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

5. Electricity: deprived if the household has no electricity
6. Sanitation: deprived if they do not have an improved toilet or if their toilet is shared (MDG Definition)
7. 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)
8. Floor: deprived if the household has dirt, sand or dung floor
9. Cooking fuel: deprived if they cook with wood, charcoal or dung
10. Assets: deprived if the household does not own more than one of: radio, TV, telephone, bike, or motorbike

A person is considered poor if they are deprived in at least 30% of the weighted indicators. The intensity of poverty denotes the proportion of indicators in which they are deprived.

Real example

Niger:^[5]

• MPI = 0.642
• H = 0.927
• A = 0.693

In Niger, 92.7% of the country's population is MPI poor (they are deprived in at least 30% of the weighted indicators, by definition). Those who are MPI poor suffer from deprivation in 69.3% of indicators, on average.

Fictional example

Country X consists of persons A, B and C. The following table shows the deprivation on each of the 10 indicators for persons A, B and C.

"0%" indicates no deprivation in that indicator, while "100%" indicates deprivation in that indicator.

Indicator	Weight	Person A	Person B	Person C
1	1/6	0%	0%	0%
2	1/6	0%	0%	0%
3	1/6	100%	100%	0%
4	1/6	0%	100%	0%
5	1/18	0%	100%	100%
6	1/18	0%	100%	100%
7	1/18	0%	0%	100%
8	1/18	100%	100%	100%
9	1/18	100%	0%	100%
10	1/18	100%	0%	0%
Weighted score		33.33%	50.00%	27.78%
Status		MPI poor	MPI poor	Not MPI poor

Factor H for country X is:

$\frac {1 + 1 + 0}{3} = 0.667$

Factor A for country X is:

$\frac {33.33% + 50.00%} {2} = 0.417$

Thus, the MPI for country X is:

$0.667 \times 0.417 = 0.278$

MPI in some developing countries

Country	MPI	Number of MPI Poor People (millions)	% of People who are MPI Poor	Average Intensity of MPI Poverty	% of People who are Income Poor ($1.25)
Albania	0.004	0.030	0.96	38.10	2.0
Angola	0.452	13.614	77.35	58.43	54.3
Argentina	0.011	1.181	2.99	37.74	4.5
Armenia	0.008	0.070	2.25	36.53	10.6
Azerbaijan	0.021	0.461	5.37	38.61	2.0
Bangladesh	0.291	91.166	57.77	50.43	49.6
Belarus	0.000	0.002	0.02	35.12	2.0
Belize	0.024	0.017	5.57	42.55	N/A
Benin	0.412	6.044	71.95	57.30	47.3
Bolivia	0.175	3.446	36.28	48.28	19.6
Bosnia and Herzegovina	0.003	0.031	0.81	37.19	2.0
Brazil	0.039	16.205	8.52	45.97	5.2
Burkina Faso	0.536	12.142	82.60	64.87	56.5
Burundi	0.530	6.591	84.50	62.69	81.3
Cambodia	0.263	7.703	53.87	48.88	40.2
Cameroon	0.299	10.211	54.61	54.67	32.8
Central African Republic	0.512	3.716	86.41	59.29	62.4
Chad	0.344	6.667	62.90	54.72	61.9
People's Republic of China	0.056	165.787	12.47	44.89	15.9
Colombia	0.041	4.090	9.21	44.12	16.0
Comoros	0.408	0.444	73.93	55.25	46.1
Congo	0.393	45.740	73.18	53.73	59.2
Côte d'Ivoire	0.320	10.484	52.16	61.39	23.3
Croatia	0.007	0.070	1.60	41.56	2.0
Czech Republic	0.000	0.001	0.01	46.67	2.0
Djibouti	0.139	0.235	29.32	47.25	18.8
Dominican Republic	0.048	1.083	11.05	43.28	5.0
Ecuador	0.009	0.294	2.21	41.59	4.7
Egypt	0.026	5.138	6.41	40.37	2.0
Estonia	0.026	0.094	7.22	36.54	2.0
Ethiopia	0.582	70.709	89.96	64.74	39.0
Gabon	0.161	0.495	35.39	45.47	4.8
Gambia	0.324	0.967	60.42	53.56	34.3
Georgia	0.003	0.035	0.80	35.21	13.4
Ghana	0.140	6.894	30.11	46.40	30.0
Guatemala	0.127	3.466	25.86	49.11	11.7
Guinea	0.505	7.906	82.35	61.28	70.1
Guyana	0.055	0.110	13.77	39.67	7.7
Haiti	0.306	5.556	57.27	53.34	54.9
Honduras	0.160	2.349	32.62	48.91	18.2
Hungary	0.003	0.076	0.76	38.89	2.0
India	0.296	644.958	55.38	53.50	41.6
Indonesia	0.095	46.666	20.77	45.90	7.5
Iraq	0.059	4.203	14.25	41.27	N/A
Jordan	0.010	0.159	2.70	35.45	2.0
Kazakhstan	0.002	0.090	0.59	36.90	3.1
Kenya	0.302	22.835	60.41	50.01	19.7
Kyrgyzstan	0.019	0.258	4.86	38.81	21.8
Laos	0.267	2.882	47.25	56.50	44.0
Latvia	0.001	0.007	0.30	46.67	2.0
Lesotho	0.220	0.961	48.07	45.79	43.4
Liberia	0.484	3.022	83.94	57.65	83.7
Republic of Macedonia	0.008	0.038	1.92	40.87	2.0
Madagascar	0.413	13.114	70.51	58.54	67.8
Malawi	0.384	10.406	72.26	53.19	73.9
Mali	0.564	10.806	87.14	64.71	51.4
Mauritania	0.352	1.912	61.68	57.07	21.2
Mexico	0.015	4.278	3.98	38.86	2.0
Mongolia	0.065	0.410	15.76	41.01	22.4
Montenegro	0.006	0.009	1.53	41.61	N/A
Morocco	0.139	8.892	28.50	48.83	2.5
Mozambique	0.481	17.475	79.79	60.25	74.7
Myanmar	0.088	6.969	14.19	62.01	N/A
Namibia	0.187	0.832	39.62	47.19	49.1
Nepal	0.350	18.322	64.74	54.05	55.1
Nicaragua	0.211	2.281	40.73	51.86	15.8
Niger	0.642	13.070	92.69	69.31	65.9
Nigeria	0.368	93.832	63.53	57.87	64.4
Pakistan	0.275	88.276	50.97	54.03	22.6
Palestinian territories	0.003	0.028	0.69	38.22	N/A
Paraguay	0.064	0.809	13.26	48.50	6.5
Peru	0.085	5.645	19.81	43.09	7.9
Philippines	0.067	11.158	12.58	53.45	22.6
Moldova	0.008	0.081	2.19	37.55	8.1
Russia	0.005	1.795	1.26	38.85	2.0
Rwanda	0.443	7.730	81.36	54.39	76.6
São Tomé and Príncipe	0.236	0.103	51.62	45.80	N/A
Senegal	0.384	7.964	66.92	57.40	33.5
Serbia	0.003	0.081	0.83	40.03	N/A
Sierra Leone	0.489	4.399	81.47	60.04	53.4
Slovakia	0.000	0.000	0.00	0.00	2.0
Slovenia	0.000	0.000	0.00	0.00	2.0
Somalia	0.514	7.061	81.16	63.30	N/A
South Africa	0.014	1.510	3.07	46.70	26.2
Sri Lanka	0.021	1.061	5.33	38.67	14.0
Suriname	0.044	0.037	7.46	58.82	15.5
Swaziland	0.183	0.494	41.13	44.44	62.9
Syria	0.021	1.134	5.53	37.52	N/A
Tajikistan	0.068	1.145	17.10	40.03	21.5
Tanzania	0.367	26.952	65.26	56.29	88.5
Thailand	0.006	1.105	1.65	38.49	2.0
Togo	0.284	3.418	54.25	52.43	38.7
Trinidad and Tobago	0.020	0.073	5.62	35.12	4.2
Tunisia	0.010	0.285	2.82	37.13	2.6
Turkey	0.039	6.183	8.47	45.93	2.7
Ukraine	0.008	1.014	2.19	35.74	2.0
United Arab Emirates	0.002	0.025	0.57	35.32	N/A
Uruguay	0.006	0.056	1.68	34.71	2.0
Uzbekistan	0.008	0.625	2.32	36.21	46.3
Vietnam	0.075	12.313	14.30	52.50	21.5
Yemen	0.283	11.710	52.51	53.94	17.5
Zambia	0.325	7.830	63.66	51.10	64.3
Zimbabwe	0.174	4.769	38.46	45.22	N/A

Source: Alkire, Sabina and Maria Emma Santos. 2010. Multidimensional Poverty Index: 2010 Data. Oxford Poverty and Human Development Initiative. Available at: www.ophi.org.uk/policy/multidimensional-poverty-index/.

See also

• Human Development Index

References

1. ^ "A wealth of data. A useful new way to capture the many aspects of poverty". The Economist. July 29, 2010. http://www.economist.com/node/16693283. Retrieved 2010-08-04. "Aided by the improved availability of survey data about living conditions for households in over 100 developing countries, the researchers have come up with a new index, called the Multidimensional Poverty Index (MPI), which the United Nations Development Programme (UNDP) will use in its next “Human Development Report” in October." 
2. ^ "Multidimensional Poverty Index". Oxford Poverty & Human Development Initiative. http://www.ophi.org.uk/policy/multidimensional-poverty-index/. Retrieved 2010-08-04. 
3. ^ http://www.ophi.org.uk/wp-content/uploads/Argentina.pdf
4. ^ http://www.ophi.org.uk/wp-content/uploads/Argentina.pdf
5. ^ http://www.ophi.org.uk/wp-content/uploads/Niger.pdf