The MPI is a new measure of poverty taking into account a range of factors –education, health and standard of living- rather than just income. It will be used in the UN’s Human Development Report 2010 and was developed by Sabina Alkire and Maria Emma Santos of the Oxford Poverty and Human Development Initiative in conjunction with James Foster of George Washington University.
Why has it been developed?
■ Income-based poverty measures such as “under a dollar-a-day” (actually $1.25 since 2005) don’t capture issues of access to, for example, good healthcare or education.
■ The MPI information is more actionable than income-based poverty. The authors have analysed developing countries into one of fi ve groups and suggest that different policies for amelioration are required for each group.
How is it calculated?
■ There are ten poverty indicators, grouped into three dimensions covering education, health and standard of living. Most of the indicators are related to the Millennium Development Goals.
■ Households across the country are surveyed to see which of the indicators affect them.
■ Poverty intensity is measured by a weighted count of the indicators that affect the household. The weighting is 1/6 for each of the two indicators in the education and health dimensions and 1/18 for each of the six indicators in standard of living (see diagram right).
■ A household’s inhabitants are considered MPI poor if their poverty intensity is greater than 30%.
■ A population’s MPI is the proportion of people who are MPI poor times the average poverty intensity of the poor. So for example 90% of Ethiopia’s population are MPI poor, and their average poverty intensity is 64.7%, so Ethiopia’s MPI is 90% x 64.7% = 0.582.
