Multidimensional Poverty Index

The Global Multidimensional Poverty Index (MPI) 2023, jointly released by the UNDP and OPHI, provides a comprehensive assessment of poverty, measuring interconnected deprivations in health, education, and living standards across 110 countries and 1,200 subnational regions. The MPI evaluates poverty at the individual level based on ten indicators. Key findings indicate that 1.1 billion people (18% of the global population) are identified as poor, with Sub-Saharan Africa hosting half of them. India-specific findings reveal significant progress, with 415 million people moving out of poverty, although over 230 million still live in poverty. The MPI, focusing on outcomes rather than income, is considered a superior poverty indicator. However, it has limitations, including a lack of inequality measurement among the poor. NITI Aayog's National MPI, released in October 2023, reflects a substantial reduction in India's multidimensional poverty. The global MPI plays a crucial role in identifying severe poverty, providing valuable insights for policy formulation at local and international levels.

In July 2023, the United Nations Development Programme (UNDP) and the Oxford Poverty and Human Development Initiative (OPHI) published the Global Multidimensional Poverty Index (MPI) 2023. The report was titled “Unstacking global poverty: Data for high impact action”.

The annual Global Multidimensional Poverty Index (MPI) has been collaboratively released by the Human Development Report Office (HDRO) of the UNDP and the OPHI since 2010. It assesses interconnected lacks in health, education, and living standards that directly impact an individual's life and well-being. This global MPI is a unique count-based measure that evaluates the deprivations across more than 110 countries and 1,200 subnational regions. It provides a crucial perspective on SDG 1(Poverty Reduction) while including indicators related to other Sustainable Development Goals (SDGs). It consolidates data from 110 developing countries, encompassing 6.1 billion people, which represents 92 percent of the population in developing nations.

The global Multidimensional Poverty Index (MPI) initiates by formulating a deprivation profile and outlining deficiencies in 10 indicators across health, education, and living standards.

1. Health(1/3)
   1. Nutrition (1/6) - Individuals under 70 years lacking nutritional information are considered undernourished.
   2. Child mortality (1/6) - The household has experienced the death of a child under 18 in the five-year period preceding the survey.
2. Education(1/3)
   1. Years of schooling (1/6) - No eligible household member has completed six years of schooling.
   2. School attendance (1/6) - Any school-aged child is not attending school up to the age at which they would complete class 8.
3. Living Standards(1/3)
   1. Cooking fuel (1/18) - The household uses solid fuel like dung, agricultural crops, shrubs, wood, charcoal, or coal for cooking.
   2. Sanitation (1/18) - The household either lacks an improved sanitation facility or has none, or if improved, it is shared with other households.
   3. Drinking water (1/18) - The household's drinking water source is unsafe, or safe drinking water is a 30-minute or longer walk from home, roundtrip.
   4. Electricity (1/18) - The household has no access to electricity.
   5. Housing (1/18) - The household possesses inadequate housing materials in any of the three components: floor, roof, or walls.
   6. Assets (1/18) - The household doesn't own more than one of the specified assets, which include radio, TV, telephone, computer, animal cart, bicycle, motorbike, or refrigerator, and doesn't own a car or truck.

The MPI evaluates poverty on an individual basis. If an individual experiences deprivation in one-third (33%) or more of the ten weighted indicators, the global MPI categorizes them as 'MPI poor.' Additionally, the severity or intensity of their poverty is calculated by the percentage of deprivations they are undergoing.

• In 110 nations, 1.1 billion individuals, constituting 18% of the 6.1 billion global population, are identified as poor.
• Sub-Saharan Africa is home to 534 million individuals, accounting for half of the total impoverished population.
• South Asia accommodates 389 million individuals, representing over one-third of the global impoverished populace.
• The global MPI value was halved by 25 countries.
• Child poverty stands at 27.7%, while it is 13.4% among adults.
• Children under the age of 18 make up half of the 1.1 billion impoverished individuals, totaling 566 million.
• Rural regions host 84% of the impoverished population, with rural areas consistently exhibiting higher poverty rates than their urban counterparts across all global regions.

• In India- 415 million people moved out of poverty during 2005/2006– 2019/2021.
• Across all indicators, deprivation saw a decline, with the incidence dropping from 55.1 percent to 16.4 percent.
• India achieved a significant feat by halving its global MPI values in just 15 years.
• The states and demographic groups experiencing the most absolute progress include the most impoverished states, children, and individuals belonging to disadvantaged caste groups.
• Despite these advancements, India still has a substantial population of over 230 million people living in poverty.

While the World Bank has set the global poverty line at $1.90 per day using 2011 purchasing power parity which is a threshold that theoretically covers basic needs, this income-centric metric has limitations. It doesn't consistently reflect the actual experience of poverty, as individuals might surpass this income threshold yet still lack essentials like adequate housing and sanitation. In contrast, the multidimensional approach assesses poverty directly by evaluating the capability to fulfill various fundamental human needs, including housing, healthcare, sanitation, and education. In this framework, income is viewed as a means to achieve these ends, shifting the focus from measuring the means to directly evaluating the outcomes.

• The index comprises indicators that encompass both outputs and inputs, like years of schooling and cooking fuel, hence it is difficult to determine which dimensions are relevant
• Health data, though indicative, are relatively weak and may not capture the deprivations of certain groups, particularly in terms of nutrition, despite the emergence of plausible and recognizable patterns.
• Minimum acceptable standards for specific indicators, such as elements of the living standard, can vary significantly based on cultural differences.
• The MPI does not gauge inequality among the impoverished, i.e., it doesn't assess how deprivations are distributed within the poor population.

In October 2023, the NITI Aayog released its National Multidimensional Poverty Index (MPI): A Progress Review 2023, utilizing data from the National Family Health Survey (NFHS). Mirroring the global MPI, India's national MPI comprises three equally weighted dimensions: Health, Education, and Standard of Living. While the sub-indicators align, there are two additional ones—Maternal Health in the Health category and Bank Account in the Standard of Living category, making a total of 12 sub-indicators.

As per this report,

• The calculated MPI figures indicate a significant reduction of almost 50% in India's national MPI value, leading to a decrease in the percentage of the population experiencing multidimensional poverty from 24.85% to 14.96% between 2015-16 and 2019-21.
• The prevalence of poverty in rural areas declined from 32.59% to 19.28%, while in urban areas, it decreased from 8.65% to 5.27% during the period from 2015-16 to 2019-21.
• Approximately 135.5 million individuals successfully lifted themselves out of poverty between 2015-16 and 2019-21.
• A notable feature of the MPI is its capability to furnish estimates at the district level.

The global MPI serves as a crucial tool for identifying severe poverty across developing nations. The poverty incidence indicates the geographic distribution and prevalence of acute poverty within regions, countries, and subnational areas, as well as among different demographic groups. Understanding the intensity of poverty provides valuable insights into the levels of deprivation experienced by the poorest individuals. Crafting effective policies requires a contextual approach that involves both local and international institutions. Multidimensional poverty is interconnected with and can amplify other contextual issues like conflict, environmental risks, governance issues, and economic uncertainties. Therefore, there is a demand for multidimensional poverty indices tailored to specific contexts that align with national definitions of poverty.