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Many faces of poverty
SEP 08 -
Poverty is a complex phenomenon. It cannot be viewed from a single dimension because it is multifaceted. Poverty is not only an inadequacy of income but also a lack of other basic social and physical attributes necessary for a household to maintain a decent livelihood. The ‘poor’ may be deprived of access to health and education, or basic services such as access to electricity, drinking water, flooring, cooking fuel, toilet and assets. The human development approach to poverty has long been questioned for its disproportionate focus on income. The Oxford Poverty and Human Development Initiative (OPHI) has now come up with the concept of a multidimensional poverty index (MPI) which directly measures the combination of deprivations that characterises each household. Subsequently, the 20th Anniversary edition of the United Nations Development Programme’s flagship Human Development Report (HDR) is introducing this new international measure of poverty.
The MPI measures poverty more accurately and reflects actual deprivations. Further, it reflects the intensity of poverty—the sum of weighted deprivations that each household faces at a time. It complements the traditional measurement of poverty primarily based on income. However, income clearly matters. It is important because it determines how much people can buy and therefore, whether they can afford various other amenities. But rising income does not always translate into better health or sanitation. MPI indicates a lacuna or a bias in the measurement of poverty which is unable to capture its various dimensions. It follows that the lives of people living in poverty are affected by more than just their income. The MPI uses 10 indicators to measure three critical dimensions to identify the incidence of poverty at the household level: education, health and standard of living. These directly measure deprivations in health and educational outcomes as key basic services which are necessary for maintaining a minimum standard of life.
Education is the first major component of the MPI. A household or a person is said to be poor if deprived from education, among other things. As being the major component for determining a household’s poverty, MPI includes education as an important indicator to identify the poor which is aggregated with the help of two basic indicators. 1) Years of schooling: a household is deprived if none of its members has completed five years of schooling and 2) child enrolment: deprived if any school-aged child between 1-8 years is not attending school. Likewise, health is the second major component in MPI. Like education, health also includes two indicators with which to measure the deprivation in health. 3) Child mortality: deprived if any child has died in the family and 4) nutrition: deprived if any adult or child for whom there is nutritional information is malnourished. The health index is prepared on the basis of the aggregate of these two variables.
Standard of living includes six indicators 5) Electricity: deprived if the household has no electricity, 6) Drinking water: deprived if the household does not have access to clean drinking water or clean water is only available after more than 30 minutes walk, 7) Sanitation: deprived if they do not have an improved toilet or if their toilet is shared, 8) Flooring: deprived if the household has dirt, sand or dung floor 9) Cooking Fuel: deprived if they cook with wood, charcoal or dung and 10) Assets: deprived if the household does not own more than one of: radio, TV, telephone, bike, or motorbike, and does not own a car or tractor.
A household is counted as poor if it is deprived in over 30 percent of the 10 indicators. It indicates that a person who is deprived in 75 percent of indicators is clearly worse off than someone who is deprived in 45 percent of indicators. On the basis of this demarcation, researchers can then calculate the percentage of people across countries and within countries by ethnicity, locality or other key household characteristics.
The MPI is flexible. It can be used with different dimensions and indicators to create poverty measures specific to different societies and situations. The MPI shows the incidence, intensity and depth of poverty, as well as inequality among the poor, depending on the type of data available.
The government of Nepal is currently undertaking the Nepal Living Standard Survey to estimate the vulnerable people. This survey could provide the necessary information for the construction of MPI. Therefore, the government should conduct the NLSS with the MPI in mind. This will facilitate in revealing the interconnections among deprivations and will be useful for planners and policymakers who are often handicapped by a lack of in-depth information on poverty. MPI will enable policymakers to target resources and design policies more effectively. Other dimensions of interest, such as work, physical safety, and empowerment, could be incorporated into the MPI in the future as data become available.
(The author is associate professor, Central Department of Economics, Tribhuvan University)
Posted on: 2010-09-09 08:43
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