The Multidimensional Poverty Index (MPI) is a comprehensive measure of poverty that goes beyond traditional income-based poverty indicators to capture various deprivations faced by people in their daily lives. It was developed by the Oxford Poverty and Human Development Initiative (OPHI) and the United Nations Development Programme (UNDP) in 2010. The MPI identifies individuals as poor based on multiple factors that directly affect their quality of life, such as health, education, and living standards.
Key Components of the Multidimensional Poverty Index
The MPI is based on three main dimensions, which are further divided into 10 indicators:
1. Health (Two Indicators)
- Nutrition: If any household member is undernourished, the household is deprived in this indicator.
- Child Mortality: If any child under the age of 18 in the household has died, the household is deprived.
2. Education (Two Indicators)
- Years of Schooling: If no household member has completed at least six years of schooling, the household is deprived.
- School Attendance: If any school-aged child is not attending school up to the age at which they should finish class 8, the household is deprived.
3. Living Standards (Six Indicators)
- Electricity: If the household does not have access to electricity, it is deprived.
- Sanitation: If the household’s sanitation facility is not improved or shared with other households, the household is deprived.
- Drinking Water: If the household does not have access to clean drinking water within a 30-minute walk from home, it is deprived.
- Flooring: If the household has a dirt, sand, or dung floor, it is deprived.
- Cooking Fuel: If the household cooks with wood, charcoal, or dung, it is deprived.
- Assets: If the household does not own more than one of the following assets—radio, TV, telephone, bike, motorbike, or refrigerator—and does not own a car or truck, it is deprived.
Methodology of MPI Calculation
Each dimension (health, education, and living standards) is equally weighted. Each indicator within these dimensions is also weighted. For instance:
- Health and Education indicators are each given a weight of 1/6 (since there are two indicators in each of these dimensions).
- Living Standards indicators are each given a weight of 1/18 (since there are six indicators in this dimension).
A household is considered multidimensionally poor if it is deprived in at least one-third of the weighted indicators (i.e., if the household scores 33% or more on the deprivation index).
Example of MPI in Action
India’s MPI:
India is a notable example of how the MPI has been used to measure and track poverty reduction. The 2020 Global Multidimensional Poverty Index showed that India made significant strides in reducing multidimensional poverty between 2005-06 and 2015-16, lifting more than 270 million people out of multidimensional poverty.
- Deprivations in Health: In rural areas of India, undernutrition and child mortality were significant contributors to multidimensional poverty. Many households lacked access to adequate healthcare facilities and suffered from poor nutrition, particularly among children.
- Deprivations in Education: Poor education outcomes were a major factor in India’s MPI. Many children, especially girls in rural areas, did not attend school, or adults in the household had not completed the minimum years of schooling, perpetuating poverty across generations.
- Deprivations in Living Standards: Living standards in many parts of rural India contributed significantly to the MPI. Households lacked access to clean drinking water, sanitation, electricity, and adequate housing. Many families still relied on traditional fuels like wood and dung for cooking, leading to health hazards from indoor air pollution.
Example of a Poor Household in Rural India:
Consider a household in a remote village in India:
- Health Deprivation: The family has children who are undernourished and lacks access to proper healthcare, leading to high child mortality rates.
- Education Deprivation: The adults in the household have not completed basic schooling, and some of the children do not attend school regularly due to long distances and the need for their help with household chores or farm work.
- Living Standards Deprivation: The household lacks electricity, uses an open fire for cooking, and has a dirt floor in their home. They fetch water from a source that is more than 30 minutes away, and the sanitation facilities are inadequate and shared with other families in the community.
This household would be identified as multidimensionally poor because they are deprived in multiple indicators across health, education, and living standards.
Advantages of the MPI Over Traditional Poverty Measures
- Holistic View of Poverty: The MPI recognizes that poverty is not just about a lack of income but includes multiple deprivations that individuals experience simultaneously.
- Policy Relevance: By identifying specific deprivations (e.g., in health, education, or living standards), the MPI helps governments and organizations to tailor poverty alleviation policies more effectively. For example, a region with high child mortality and poor education outcomes may require different interventions than a region where living standards are the main issue.
- Tracking Progress: The MPI allows for tracking poverty reduction efforts across multiple dimensions, providing a more nuanced view of progress over time.
Challenges and Criticisms of MPI
- Data Limitations: The accuracy of the MPI depends on the availability and quality of data. In many low-income countries, reliable data on health, education, and living standards can be scarce or outdated.
- Complexity: The MPI is more complex than traditional poverty measures, making it harder for policymakers and the public to understand.
- Arbitrariness of Thresholds: Some critics argue that the cut-off for multidimensional poverty (33% deprivation) is arbitrary and may not accurately reflect people’s lived experiences of poverty in different contexts.
Conclusion
The Multidimensional Poverty Index is a significant advancement in poverty measurement, recognizing that poverty is not just about income but involves multiple, overlapping deprivations in people’s lives. By capturing data across health, education, and living standards, the MPI provides a more comprehensive view of poverty and offers a valuable tool for governments and international organizations to design targeted interventions that address the various dimensions of poverty simultaneously.
India’s experience with the MPI highlights how multidimensional poverty measurement can provide insights into specific areas of deprivation and guide efforts to reduce poverty across different sectors, ultimately improving the overall well-being of its citizens.
