COMMENTS
THE MULTIDIMENSIONAL POVERTY
INDEX:
ACHIEVEMENTS, CONCEPTUAL AND
EMPIRICAL ISSUES
CAROLINE DOTTER -STEPHAN KLASEN
George Gray Molina
Eduardo Ortiz-Juarez
UNDP, Regional Bureau for Latin America and the Caribbean
International Conference on Measuring Human Development
March 4-5, 2013. New York City
Overview
• Index of acute multidimensional poverty, a counterpart to the $1,25
dollar a day indicator.
• Of great policy interest.
• Decomposability –what’s leading progress –education or access to water?
• Disaggregation –all the way down to the hh, all the way up to the nation-state.
• Dynamics – moves much faster than HDI
Conceptual and empirical issues
• Union, intermediate, or
intersection cutoffs?
(intersection)
• Inequality in the spread of
deprivations (pending)
• Reporting the
multidimensional incidence
instead of the MPI (both)
• Choice of dimensional
cutoffs (pending)
• Use of the World Health
Survey
• Problematic use
• Dynamics in the MPI
• Further work on
understanding the dynamics
of changes
• Simplification of the MPI
• Reduce the number of
standard of living indicators
• Modify schooling, mortality,
and nutritional indicators
A higher threshold MPI
• Not to celebrate progress in middle income
• Why not focus empirical
firepower on creating an MPI
2.0, equivalent to the 4
dollar/day indicator?
• “Similar to the international
income poverty line which is
less and less relevant for an
increasing number of countries
whose national poverty lines are
substantially above the $1.25
line, one might consider whether
one should similarly construct a
(weakly) relative MPI cut-off that
rises with average well-being in
a country”.
countries, nor highlight their middle classes,
but for three other reasons:
- The focus on poverty will tend to
disappear w/out indicators, Currently
37 million under 1.25/day line in LAC,
but close to 200 million under/near
4/day poverty line.
- Inequalities need to be highlighted.
The focus on a higher threshold
indicator will illustrate a moving
gradient. Will also allow a debate on
how to transition from highly targeted
interventions to universal floors of
social protection.
- Decompositions on income inequality
show (predictably) that “labor
income” explains improvements.
Need something similar for nonincome based well-being. Will likely
highlight the role of social policy and
the state.
Could add new
dimensions, new
indicators
Could tinker
with
thresholds for
first-cutoff
Could tinker with
second-cutoff or
estimate “weaklyrelative” cutoffs that
rise with income
(Chen and Ravallion
2012)
An (imperfect) example of higher thresholds relative to LAC
Dimension
Indicator
Material well-being
Education
Dwelling
Brazil
Dimensional cut-offs
Asset index
Having a car
Child in school
All children between 7 and 15 attending school
Education of the head
At least five years of education
Running water
Having tap water in the dwelling
Sanitation
Having flush toilet in the dwelling
Quality of living space
House with non-precarious materials
Nicaragua
Uruguay
70.0
Meaningful for policy
purposes (LAC-specific)
60.0
50.0
40.0
What about Asia,
Africa, and the Middle
East?
30.0
20.0
10.0
0.0
Incidence
Breadth
MPI
Original MPI (cut-off = 1/3)
Incidence
Breadth
MPI
Region-specific MPI (cut-off = 1/3)
Source: HDR 2011, and own calculations. All three indicators are expressed in %.
The poverty line gradient (left)
Where are the multidimensional poor? (right)
$4 a day
$5 a day
Central and Eastern
Europe and the CIS
12 millions
0.7%
Sub-Saharan Africa
458 millions
27.6%
Latin America and
Caribbean
51 millions
(3.1%)
East Asia and the
Pacific
255 millions
15.4%
Arab States
39 millions
2.3%
$1.25 a day
$2.5 a day
Source: Chen & Ravallion 2012
South Asia
844 millions
50.9%
Source: Alkire & Santos 2010
What dimensions/indicators are relevant in each region?
To conclude…
•
The MPI:
– Has been successful in comparing
acute deprivations across countries. It
can be seen as the counterpart of the
$1.25 poverty line.
– Very policy relevant: cases of
Colombia, Mexico, and subnational
governments in Brazil and El
Salvador.
– Basic MPI might need some twitches,
but the most important issue is the
use, not the exquisite statistical
series. Again, the biggest complaint
on MPI is the slow periodicity, not
empirical or conceptual flaws.
• To do:
– “Higher-threshold” MPIs
as counterparts to the
$2.5, $4, or $5 dollars a
day poverty lines are
needed.
Thought experiment:
Why not describe how trajectories
diverge/converge between the
$1.25/MPI 1.0 and $4/MPI 2.0 over
time, say back from 2000? The
dynamics should be different, should
yield different insight about how
poverty evolves.
Why not analyze the drivers of MPI
progress more carefully? Will likely
move pendulum from market-based
“labor income story” to social policy
“human assets” story.