Wednesday, November 7, 2018

SEP 18 ECO 9 Multidimensional Poverty Index


Multidimensional Poverty Index -2018


Why in news?

The 2018 global Multidimensional Poverty Index was released by the United Nations Development Programme (UNDP) and the Oxford Poverty and Human Development Initiative (OPHI).

Key findings of MPI 2018

The  global  Multidimensional  Poverty  Index  (MPI)-
2018 covers 105 countries in total, which are home to
75 per cent of the world’s population, or 5.7 billion
people.

A total of 1.34 billion people from 105 countries are  multidimensionally  poor  i.e.  23.3%  of the people   living   in   these   countries.   They   are


The Oxford Poverty and Human Development Initiative (OPHI) is an economic research centre within the Oxford Department of International Development at the University of Oxford.
OPHI  aims  to  build  and  advance  a  more  systematic methodological and economic framework for reducing multidimensional poverty, grounded in people’s experiences and values. OPHI works towards this by:
o  Broadening poverty measurement.
o  Improving data on poverty
o  Building capacity
o  Impacting policy
OPHI’s  work  is  grounded  in   Amartya  Sen’s  capability
approach. OPHI works to implement this approach by creating real tools that inform policies to reduce poverty.

deprived in at least one-third of overlapping deprivations
in  health,  education,  and living  standards,  lacking  such
things as clean water, sanitation, adequate nutrition, or primary education.
83% of multidimensionally  poor people (more than 1.1 billion people) live in either Sub-Saharan Africa or South Asia.
Two-thirds of all MPI poor people (nearly 892 million) live in middle-income countries.
Multidimensional poverty is much more intense in rural areas than urban areas; globally there are 1.1 billion people living in multidimensional poverty in rural areas, compared to 0.2 billion people living in multidimensional poverty in urban areas.
About  612  million  people  –  46%  of  those  who  are multidimensionally poor – live in severe poverty, that is, they are deprived in at least half of the weighted indicators


The MPI measures
Incidence of poverty: the proportion of the population who are poor according to the MPI (those who are deprived in at least one third of the weighted indicators).
Average  intensity  of  poverty:  the  average share of deprivations people experience at the same time.
MPI value: The MPI value, which ranges from zero to one, is calculated by multiplying the incidence of poverty by the average intensity of poverty. It shows the proportion of deprivations that a countries’ poor people experience out of the total possible deprivations that would be experienced if every person in the society were poor and deprived in every indicator.

in health, education, and living standards. Sub-Saharan Africa accounts for 56% of world’s severely poor.
In India, 271 million people moved out of poverty between 2005-06 and 2015-16, but the country still has the largest number of people living in multidimensional poverty in the world (364 million people). Even so, India has cut its poverty rate from 55% to 28% in ten years.
After India, the countries with the largest number of people living in multidimensional poverty are Nigeria (97 million), Ethiopia (86 million), Pakistan (85 million), and Bangladesh (67 million).

What is the global MPI?

The  global  Multidimensional  Poverty  Index  (MPI)  is  an international measure of acute poverty covering over 100 developing countries. It complements traditional income- based poverty measures by capturing the severe deprivations that each person faces at the same time with respect to education, health and living standards.
The  MPI  measures  multiple  deprivations  in  the  same households in education, health and living standards and 10 indicators,   namely   nutrition,   child  mortality,   years   of



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schooling, school attendance, sanitation, cooking fuel, drinking water, electricity, housing and assets.
A person is identified as multidimensionally poor (or ‘MPI poor’) if deprived in at least one third of the dimensions. The MPI is calculated by multiplying the incidence of poverty (the percentage of people identified as MPI poor) by the average intensity of poverty across the poor. So, it reflects both the share of people in poverty and the degree to which they are deprived.
•   The global MPI was developed by OPHI with the UNDP for inclusion in UNDP’s flagship Human Development
Report (HDR) in 2010. It has been published in the HDR ever since.


How MPI is better than Income Poverty?

As   per   World   Bank,   international poverty  line  is  currently  valued  at
$1.90 in terms of 2011 purchasing power parity. Income allows people to meet basic needs but at a practical level we   find   income   does   not   always provide a sufficient representation  of poverty.
o For example: People may be above the poverty line but still deprived of needs such as housing. So, another
way to measure poverty is to measure it directly in terms of the ability to meet a number of basic human needs such as access to housing, healthcare, sanitation and education. This is a multidimensional approach.
From this perspective,  income is the means to ends, while the ends themselves are the satisfaction of basic human needs. The multidimensional approach has a direct focus on the ends.

Limitations of the MPI

The indicators  include both  outputs, such as years of schooling, and inputs, such as cooking fuel. It also includes both stock and flow indicators. A stock indicator  is measured  at a particular point in time, and it may have accumulated in the past. On the contrary, a flow indicator is measured per unit of time. Surveys do not have flow indicators for all dimensions.
The health data are relatively  weak and overlook some groups’ deprivations especially for nutrition, though the patterns that emerge are


Why are there such wide discrepancies between MPI poverty estimates and $1.90/day poverty estimates in so many countries?
The  MPI  complements  income  poverty  measures.  It  measures various deprivations directly. In practice, although there is a clear overall relationship between MPI and $1.90/day poverty, the estimates do differ for many countries. Possibilities can include public services, as well as different abilities to convert income into outcomes such as good nutrition.
The fact that there are differences does not mean that the national poverty number, or the MPI headcount is wrong – these simply measure different conceptions of poverty. At the same time, just as national poverty measures, in contrast, are designed to reflect the national situation more accurately and often differ in very useful ways from the $1.90 measure, some countries may wish to build a national multidimensional poverty index that is tailored to their context, to complement the global MPI.
The relationship between these measures, as well as their policy implications and methodological improvement, are priorities for further research.


What’s new in MPI-2018?

The new global MPI has changes in five of the ten indicators from the original MPI: nutrition, child mortality, and years of schooling, housing and assets.

The new threshold for nutrition includes BMI (Body Mass Index)- for-age, and stunting as well as underweight for children.
For child mortality, it considers whether a child has, sadly, perished in the household in the last five years preceding the interview date.
For years of schooling, the new threshold requires six years, rather than five years, of schooling.
A household is deprived in the housing indicator if the floor is made of natural materials; or the roof or walls are made of natural or rudimentary materials.
Finally, the assets indicator now includes ownership of computers and animal carts.

MPI 2018 have been revised to better align with the SDGs. The MPI shows how deprivations related to SDGs 1,2,3,4,6,7, and 11 are concretely interlinked in poor people’s lives. The global MPI reflects deprivations each person faces in multiple SDG areas – education, water and sanitation, health, housing, etc. Connecting to at least seven SDGs, the MPI brings many concerns together into one headline measure. And, since people are MPI poor if they are deprived in one-third of the weighted indicators, the MPI focuses on people who are being left behind in multiple SDGs at the same time.

plausible and familiar. For example, in many countries there is no nutritional information for women. In other countries, there is no nutritional information for men, in others still, for children.



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Although the MPI indicators were selected in order to guarantee as much cross-country comparability as possible, indicators’ comparability is still imperfect for two reasons.
o As detailed above in the case of nutrition, the information differs across the surveys used.
o Even when they collect the same information, the minimum acceptable standards on certain indicators,
such as some of the living standard ones, may vary greatly according to the culture.
Intra-household inequalities may be severe, but, for the moment, these cannot be reflected in the global MPI, precisely because there is no individual-level information for all the indicators.
While the MPI goes well beyond a headcount ratio to include the intensity of poverty experienced, it does not measure the depth of poverty—how far away, on average, from the deprivation cut-off in each indicator poor people are. Nor does it measure inequality among the poor—how deprivation is distributed among the poor.
•   The estimates presented are based on publicly available data and cover various years between 2005 and
2015, which limits direct cross-country comparability.

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