science

Multidimensional Poverty Index

Multidimensional Poverty Index is a science topic covered in the lgStudy science library. This page brings together a partial reference excerpt, illustrations, worked examples, real-world applications and a short study plan, so you can understand Multidimensional Poverty Index rather than just read about it. In short: Multidimensional Poverty Indices use a range of indicators (monetary, health, education and others) to calculate a summary poverty figure for a given population, in which a larger figure indicates a higher level of poverty. This figure considers both the proportion of the population that is deemed poor and the 'breadth' of poverty experienced by these 'poor' households, following the Alkire & Foster 'counting method…

Key takeaways

Multidimensional Poverty Index belongs to science; place it in that map before memorising details.
Learn the definition first, then one example that makes the definition concrete.
Connect Multidimensional Poverty Index to a quantity you can measure, compute or draw — that is where exam questions come from.
Reproduce the core statement of Multidimensional Poverty Index from memory before moving on to harder problems.

Reference excerpt

Multidimensional Poverty Indices use a range of indicators (monetary, health, education and others) to calculate a summary poverty figure for a given population, in which a larger figure indicates a higher level of poverty. This figure considers both the proportion of the population that is deemed poor and the 'breadth' of poverty experienced by these 'poor' households, following the Alkire & Foster 'counting method'. The method was developed following increased criticism of monetary and consumption-based poverty measures, seeking to capture the deprivations in non-monetary factors that contribute towards well-being. While there is a standard set of indicators, dimensions, cutoffs and thresholds used for a 'Global MPI', the method is flexible and there are many examples of poverty studies that modify it to best suit their environment. The methodology has been mainly, but not exclusively, applied to developing countries. The Global Multidimensional Poverty Index (MPI) was developed in 2010 by the Oxford Poverty & Human Development Initiative (OPHI) and the United Nations Development Programme and uses health, education and standard of living indicators to determine the incidence and intensity of poverty experienced by a population. It has since been used to measure acute poverty across over 100 developing countries. The Global MPI is released annually by UNDP and OPHI and the results are published on their websites. The MPI is published along with the Human Development Index (HDI) in the Human Development Report. It replaced the Human Poverty Index.

Multidimensional Poverty Indices typically use the household as their unit of analysis, though this is not an absolute requirement. A household is deprived for a given indicator if they fail to satisfy a given 'cutoff' (e.g. having at least one adult member with at least six years of education). A household is assigned a 'deprivation score' determined by the number of indicators they are deprived in and the 'weights' assigned to those indicators. Each dimension (health, education, standard of living, etc.) is typically given an equal weighting, and each indicator within the dimension is also typically weighted equally. If this household deprivation score exceeds a given threshold (e.g. 1/3) then a household is considered to be 'multiply deprived', or simply 'poor'. The final 'MPI score' (or 'Adjusted Headcount Ratio') is determined by the proportion of households deemed 'poor', multiplied by the average deprivation score of 'poor' households. MPI advocates state that the method can be used to create a comprehensive picture of people living in poverty, and permits comparisons both across countries, regions and the world and within countries by ethnic group, urban/rural location, as well as other key household and community characteristics. MPIs are useful as an analytical tool to identify the most vulnerable people – the poorest among the poor, revealing poverty patterns within countries and over time, enabling policymakers to target resources and design policies more effectively. Critics of this methodology have pointed out that changes to cutoffs and thresholds, as well as the indicators included and weightings attributed to them can change MPI scores and the resulting poverty evaluation.

Dimensions and indicators

Dimensions The Global MPI uses three standard dimensions: Health; Education; Standard of Living and ten indicators. These mirror the Human Development Index (HDI). Multidimensional Poverty Indices used for purposes other than global comparison have sometimes used different dimensions, including income and consumption.

Indicators and cutoffs The Global MPI uses the following ten indicators with the following cutoffs.

The indicators selected for other MPI-oriented studies vary according to the availability of data and the context, as well as the theoretical considerations of the researchers.

Calculation

The Alkire-Foster 'counting method' The Alkire-Foster (AF) method is a way of measuring multidimensional poverty developed by OPHI's Sabina Alkire and James Foster. Building on the Foster-Greer-Thorbecke poverty measures, it involves counting the different types of deprivation that individuals experience at the same time, such as a lack of education or employment, or poor health or living standards. These deprivation profiles are analysed to identify who is poor and then used to construct a multidimensional index of poverty (MPI).

Constructing poverty measures The most common way of measuring poverty is to calculate the percentage of the population who are poor, known as the headcount ratio (H). Having identified who is poor, the AF methodology generates a unique class of poverty measures (Mα) that goes beyond the simple headcount ratio. Three measures in this class are of high importance:

Adjusted headcount ratio (M0), otherwise known as the MPI: This measure reflects both the incidence of poverty (the percentage of the population who are poor) and the intensity of poverty (the percentage of deprivations suffered by each person or household on average). M0 is calculated by multiplying the incidence (H) by the intensity (A). M0 = H x A. Adjusted Poverty Gap (M1): This measure reflects the incidence, intensity and depth of poverty. The depth of poverty is the average 'gap' (G) between the level of deprivation poor people experience and the poverty cut-off line. M1 = H x A x G. Adjusted Squared Poverty Gap (M2): This measure reflects the incidence, intensity, and depth of poverty, as well as inequality among the poor (captured by the squared gap, S). M2 = H x A x S. M0 can be calculated with ordinal as well as cardinal data, which is why it is most often used. Cardinal data are required to calculate M1 and M2. The AF Method is unique in that by measuring intensity it can distinguish between, for example, a group of poor people who suffer two deprivations on average and a group of poor people who suffer five deprivations on average at the same time.

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.

Factor H for country X is:

… excerpt ends here. Continue reading the full article.

Illustrations

Worked examples

Example 1 — a first encounter with Multidimensional Poverty Index

Start with the simplest possible case. Write down what Multidimensional Poverty Index claims or describes in one sentence, then invent the smallest concrete situation in which that sentence is true. In science, the smallest case is usually a single object, a single equation or a single measurement. Check that every symbol or term in your sentence has a meaning in that case.

Example 2 — changing one variable

Take the situation from Example 1 and change exactly one quantity: double it, halve it, or set it to zero. Predict what should happen to Multidimensional Poverty Index before you calculate. Comparing your prediction with the result is the fastest way to find out whether you understand the idea or only the words.

Example 3 — an exam-style question

Typical questions about Multidimensional Poverty Index ask you to (a) state it precisely, (b) apply it to given data, and (c) explain a limitation. Practise writing all three answers in under five minutes; the third part is what separates a full-mark answer from an average one.

Applications of Multidimensional Poverty Index

In research: Multidimensional Poverty Index appears in science research whenever the underlying quantities have to be modelled precisely. Papers usually cite it as a starting assumption and then explore where it breaks down.
In technology and industry: Engineering practice reuses Multidimensional Poverty Index in design rules, simulations and safety margins. Knowing the idea lets you read a specification sheet and understand why the numbers look the way they do.
In the classroom: Multidimensional Poverty Index is common in secondary-school and first-year university syllabi. It links to neighbouring topics International rankings, Measurements and definitions of poverty, Projects established in 2010, so understanding it makes those chapters shorter.
In everyday life: Look for Multidimensional Poverty Index outside the textbook — in sport, cooking, traffic, electronics or the sky above you. An example you found yourself is remembered far longer than one you were given.

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How to study Multidimensional Poverty Index in 20 minutes

Read the reference excerpt below once, without taking notes.
Close the page and write down what Multidimensional Poverty Index means in your own words.
Compare your version with the excerpt and mark what you missed.
Work through the three examples above with pen and paper.
Explain Multidimensional Poverty Index out loud to somebody else — or to Teacher Smith in the lgStudy chat.

Frequently asked questions

What is Multidimensional Poverty Index in simple terms?

Why does Multidimensional Poverty Index matter?

Because it connects several science ideas at once: it gives you a definition you can apply, a quantity you can calculate, and a way to check whether a result is plausible.

How should I study Multidimensional Poverty Index?

Read the excerpt, restate it from memory, then work through the examples and applications listed on this page. The five-step study plan above takes about twenty minutes.

What does this page cover?

It gives you a compact reference excerpt plus original lgStudy explanations, examples, applications and study material on Multidimensional Poverty Index.