Multi Dimentional Poverty Index

Introduction to Multidimensional Poverty Index The Multidimensional Poverty Index was launched by the UNDP and the Oxford Poverty & Human Development Initiative (OPHI) in 2010. Basic philosophy and significance of MPI is that it is based on the idea that poverty is not unidimensional (not just depends on income and one individual may lack several basic needs like education, health etc.), rather it is multidimensional.

The MPI measures overlapping deprivations at the household level across the same three dimensions as the Human Development Index (health, education and living standards). The index shows the proportion of poor people and the average number of deprivations each poor person experiences at the same time.

What is the methodology of MPI? The Multidimensional Poverty Index (MPI) identifies multiple deprivations and that is why the index is known as multidimensional. Methodological significance of MPI is that it recognizes poverty from different dimensions compared to the conventional methodology that measures poverty only from the income or monetary terms.

For the estimation of deprivation or poverty from different dimensions, the MPI uses three dimensions and ten indicators. The three dimensions are health, education and standard of living. Deprivations are measured for the household and individual levels.

The household data are aggregated to derive the national measure of multidimensional poverty. The three dimensions and ten indicators based on them are: The dimensions and the respective indicators used are: Education: Years of schooling and child enrolment (1/6 weightage each, total 2/6); Health: Child mortality and nutrition (1/6 weightage each, total 2/6); Standard of living: Electricity, flooring, drinking water, sanitation, cooking fuel and assets (1/18 weightage each, total 2/6) What makes a household/individual ‘multidimensionally’ poor?

Deprivation of one dimension (like education) alone may not represent poverty. Here, the MPI requires a household to be deprived in multiple indicators at the same time. A person is multidimensionally poor if she/he is deprived in one third or more (means 33% or more) of the weighted indicators (out of the ten indicators).

Those who are deprived in one half or more of the weighted indicators are considered living in extreme multidimensional poverty.

What does the MPI Measure?

The MPI identifies overlapping deprivations at the household level across the same three dimensions as the Human Development Index (health, education and living standards) and shows the proportion of poor people and the average number of deprivations each poor person experiences at the same time.

What MPI measures – acute poverty or extreme poverty?

The MPI is a measure of “acute” poverty because it reflects overlapping deprivation in basic needs. If a person is deprived in 20-33.3% of the weighted indicators they are considered ‘Vulnerable to Poverty’, and if they are deprived in 50% or more, they are identified as being in ‘Severe Poverty’.

On the other hand, World Bank’s measure of “extreme” poverty captures with an income criterion of less than $1.90 (in 2011 $PPP) a day.

What is the policy implication of MPI? The MPI methodology shows areas in which the poor are deprived and helps to identify inter-connections among those deprivations. This enables policymakers to target resources and design policies more effectively.

2018 MPI: dimensions, indicators, deprivation cutoffs, and weights The MPI looks beyond income to understand how people experience poverty in multiple and simultaneous ways. It identifies how people are being left behind across three key dimensions: health, education and standard of living, comprising 10 indicators.

People who experience deprivation in at least one third of these weighted indicators fall into the category of multidimensional poor.

Dimensions of Poverty

Indicator

An adult under 70 years of age or a child is 1/6 undernourished.

Child Any child has died in the family in the five-year 1/6 mortality period preceding the survey.

Years of No household member aged 10 years or older 1/6 schooling has completed six years of schooling.

Any school-aged child is not attending school up School to the age at which he/she would complete class 1/6 attendance 8.

Cooking The household cooks with dung, wood, charcoal 1/18 Fuel or coal.

The household’s sanitation facility is not Sanitation improved (according to SDG guidelines) or it is 1/18 improved but shared with other households. of The household does not have access to Drinking improved drinking water (according to SDG 1/18 Water guidelines) or safe drinking water is at least a 30minute walk from home, round trip.

Electricity The household has no electricity.

1/18 Housing materials for at least one of roof, walls Housing 1/18 and floor are inadequate: the floor is of natural Nutrition

Health

Education

Standard living

Deprived if living in the household where… Weight

Assets

materials and/or the roof and/or walls are of natural or rudimentary materials.

The household does not own more than one of these assets: radio, TV, telephone, computer, 1/18 animal cart, bicycle, motorbike or refrigerator, and does not own a car or truck.

MDPI and India: 271 million fewer poor people in India The 2018 Multidimensional Poverty Index provides the most comprehensive view of the many ways in which 1.3 billion people worldwide experience poverty in their daily life. In 10 years, India has nearly halved its number of multidimensional poor – a massive gain.

India has made momentous progress in reducing multidimensional poverty, according to estimates from the 2018 global Multidimensional Poverty Index (MPI) released by the United Nations Development Programme (UNDP) and the Oxford Poverty and Human Development Initiative (OPHI).

The incidence of multidimensional poverty has almost halved between 2005/6 and 2015/16, climbing down to 27.5 percent from 54.7 percent. Among South Asian countries, only Maldives has a lower headcount ratio than India at 1.9 percent, with Nepal (35.3 percent), Bangladesh (41.1 percent), and Pakistan (43.9) having higher incidences of multidimensional poverty. Though the traditionally disadvantaged groups – across states, castes, religions, and ages –are still the poorest, they have also experienced the biggest reductions in MPI through the decade, showing that they have been “catching up”. This is in line with global trends, where deeper progress among the poorest groups is reflected in the global MPI being cut by half.

The MPI looks beyond income to understand how people experience poverty in multiple and simultaneous ways. It identifies how people are being left behind across three key dimensions: health, education and living standards, and 10 indicators – nutrition, child mortality, years of schooling, school attendance, sanitation, cooking fuel, drinking water, electricity, housing and assets. Those who are deprived in at least a third of the MPI’s components are defined as multidimensionally poor.

The 2018 report, which is now closely aligned with the Sustainable Development Goals, cover almost three-quarters of the world’s population. The 2015-16 district-level calculations of the incidences of multidimensional poverty for India has been sourced from the National Family Health Survey IV. The data for 200506 is from the National Family Health Survey III. Despite the massive gains made in reducing multidimensional poverty, 364 million Indians continue to experience acute deprivations in health, nutrition, schooling and sanitation. Just over one in four multidimensionally poor people in India are under ten years of age. In 104 primarily low and middle-income

countries, 662 million children are considered multidimensionally poor. In 35 countries half of all children are poor.

The 2018 MPI data and report is available on the OPHI website and HDRO website.

There are promising signs that poverty can be tackled.

The latest figures paint a stark picture of just how many are still left behind by development, but they also demonstrate that progress can happen quickly with the right approach.

Globally, some 1.3 billion people live in multidimensional poverty, which is almost a quarter of the population of the 104 countries for which the 2018 MPI is calculated. Of these 1.3 billion, almost half - 46 percent - are thought to be living in severe poverty and are deprived in at least half of the dimensions covered in the MPI. But while there is much to be done, there are promising signs that such poverty can be - and is being - tackled. In India, the first country for which progress over time has been estimated, 271 million people moved out of poverty between 2005/06 and 2015/16. The poverty rate here has nearly halved, falling from around 55 percent to around 28 percent over the 10-year period.

“Although the level of poverty – particularly in children – is staggering so is the progress that can be made in tackling it. In India alone some 271 million have escaped multidimensional poverty in just 10 years,” said Achim Steiner, UNDP Administrator. “The Multidimensional Poverty Index gives insights that are vital for understanding the many ways in which people experience poverty, and it provides a new perspective on the scale and nature of global poverty while reminding us that eliminating it in all its forms is far from impossible.”

Although similar comparisons over time have not yet been calculated for other countries, the latest information from UNDP’s Human Development Index – released last week – shows significant development progress in all regions, including India. Since 1990, life expectancy increased by almost 4 years in South Asia (almost 11 years in India). This bodes well for improvements in multidimensional poverty.

Over half of all multidimensionally poor in India live in the four poorest states Pockets of poverty are found across India, but multidimensional poverty is particularly acute – and significant – in the four states of Bihar, Jharkhand, Uttar Pradesh and Madhya Pradesh. These accounted for 196 million MPI poor people – more than half of all MPI poor in India.

But there was also progress. Jharkhand made the biggest strides among all states in reducing multidimensional poverty, with Arunachal Pradesh, Bihar, Chhattisgarh, and Nagaland only slightly behind.

Delhi, Kerala and Goa have the lowest incidence of multidimensional poverty.

Across nearly every state, poor nutrition is the largest contributor to multidimensional poverty. Not having a household member with at least six years of education is the second largest contributor. Insufficient access to clean water and child mortality contribute least. Relatively fewer people living in poverty experience deprivations in school attendance – a significant gain.