What is the MPI?
The lives of people living in poverty are affected by more than just their income. The Multidimensional Poverty Index (MPI) complements a traditional focus on income to reflect the deprivations that a poor person faces all at once with respect to education, health and living standard. It assesses poverty at the individual level, with poor persons being those who are multiply deprived, and the extent of their poverty being measured by the range of their deprivations.
The MPI can be used to create a vivid picture of people living in poverty, both across countries, regions and the world and within countries by ethnic group, urban/rural location, or other key household characteristics. It is the first international measure of its kind, and offers an essential complement to income poverty measures because it measures deprivations directly. The MPI can be used as an analytical tool to identify the most vulnerable people, show aspects in which they are deprived and help to reveal the interconnections among deprivations. This enables policy makers to target resources and design policies more effectively. Other dimensions of interest, such as work, safety, and empowerment, could be incorporated into the MPI in the future as data become available.
The MPI reports acute poverty for 104 developing countries, which are home to 78% of the world’s people.
What does the MPI measure?
The MPI uses 10 indicators to measure three critical dimensions of poverty at the household level: education, health and living standard in 104 developing countries. These directly measured deprivations in health and educational outcomes as well as key services such as water, sanitation, and electricity reveal not only how many people are poor but also the composition of their poverty. The MPI also reflects the intensity of poverty – the sum of weighted deprivations that each household faces at the same time. A person who is deprived in 70% of the indicators is clearly worse off than someone who is deprived in 40% of the indicators.
Why is the MPI useful?
The MPI is a high resolution lens on poverty – it shows the nature of poverty better than income alone. Knowing not just who is poor but how they are poor is essential for effective human development programs and policies. This straightforward yet rigorous index allows governments and other policymakers to understand the various sources of poverty for a region, population group, or nation and target their human development plans accordingly. The index can also be used to show shifts in the composition of poverty over time so that progress, or the lack of it, can be monitored.
The MPI goes beyond previous international measures of poverty to:
- Show all the deprivations that impact someone’s life at the same time – so it can inform a holistic response.
- Identify the poorest people. Such information is vital to target people living in poverty so they benefit from key interventions.
- Show which deprivations are most common in different regions and among different groups, so that resources can be allocated and policies designed to address their particular needs.
- Reflect the results of effective policy interventions quickly. Because the MPI measures outcomes directly, it will immediately reflect changes such as school enrolment, whereas it can take time for this to affect income.
- Integrate many different aspects of poverty related to the MDGs into a single measure, reflecting interconnections among deprivations and helping to identify poverty traps.
Who can use the MPI?
- Non-Governmental Organisations
- Private Sector institutions
- Civil Society groups and Advocacy groups
How was the MPI created?
The MPI was created using a technique developed by Sabina Alkire and James Foster. The Alkire Foster method measures outcomes at the individual level (person or household) against multiple criteria (dimensions and indicators). The method is flexible and can be used with different dimensions and indicators to create measures specific to different societies and situations. For example, it can be applied to measure poverty or wellbeing, target services or conditional cash transfers and for monitoring and evaluation of programmes. The method can show the incidence, intensity and depth of poverty, as well as inequality among the poor, depending on the type of data available to create the measure. Read our policy page for more information on the method and the countries that have adopted it.
The specific indicators, cutoffs and weights the MPI employs were chosen in a long process of consultation, study, and fieldwork, and are the best combination possible to compare 104 countries, using indicators that resonate with the Millennium Development Goals.