Measuring Multidimensional Poverty Amie Gaye, Policy Specialist UNDPHDRO

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Measuring Multi-dimensional Poverty Amie Gaye,
Policy Specialist UNDP/HDRO
HDRO/RBA Regional Technical Workshop on Measuring
Human Development Nairobi September - 2007
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Structure of presentation

• Concept of poverty
• Measurement approaches
• Money metric measure
• Non-money metric measures
• Conclusion

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Concept of poverty

• Form of deprivation
• Deprivation of what?
• From whose perspective?
• These influence measurement approaches
• Common definitions are
• Inability to meet basic necessities of life
  money-metric measures
• Failure of some capabilities -lack of
  opportunities and choices to lead a dignified
  life Sens capabilities functionings
  approach
• Inability to participate in ones community
  Social exclusion

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Money metric measure

• Poverty lines
• Absolute - linked to basic welfare
• What bundle of goods services in consumption
  basket?
• Income or expenditure?
• Per capita, AEU, economies of scale
• Relative
• Interprets poverty in relation to living
  standards of a given society
• Stresses economic inequality as the primary
  indicator of poverty.
• Cut-off point arbitrary
• Not useful for monitoring

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Common money metric indices

• Headcount ratio - a measure of proportion of
  population/HH below an established poverty
• national or global (PPP US1/day)
• Depth of poverty (poverty gap index)
• Poverty severity index (squared poverty gap
  index- important for policy decisions
• Formula

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Limitation

• Money metric measures
• Do not capture access to public goods and
  non-market commodities
• Do not capture social exclusion
• Assume equal distribution of resources at
  household level
• Advantage ability to distinguish the poor from
  non-poor

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Transient poverty

• Poverty is dynamic - nature characteristics
  change over time
• Movements poverty resulting from shocks such
  droughts, floods, pests infestation of crops,
  etc.
• Understanding factors contributing to movement
• Helps develop interventions linked specific risks
• Lack of panel data poses a challenge
• Jordan 2004 HDR, measures impacts of shocks on
  livelihoods using participatory approaches

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Unmet basic needs approach (UBA)

• Are households/individuals satisfying basic needs
  in terms of the commodities or services they
  consume?
• Commonly selected commodities services are
• Housing construction materials
• Health nutrition, access to water sanitation
• Education literacy, basic education

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Implementation

• Country specificities influence the premise of
  the UBA
• South Africa 2003 HDR focuses on provision of
  public services introduces service deprivation
  index (SDI)
• Indicators-housing type, energy type (for
  cooking, heating lighting), water, sanitation
  refuse removal.
• SDI measures the distribution of progress in
  reducing deprivation in basic services
• Limitation of UBA
• shaped around commodity evaluation

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HPITwo approaches

• Human poverty-location specific
• Nature of deprivation vary with social economic
  conditions
• Choice of indicators has to be sensitive to
  country specific context
• HPI -1 for developing countries
• HPI- 2 for developed countries

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HPI vs. National Poverty Line
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Social Exclusion

• Intended to capture structural features of
  poverty.
• Inability to participate in ones community
• Exclusion from political, cultural economic
  processes
• Captured through qualitative surveys

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Conclusion

• Concept of poverty-- important determinant of
  policy approach.
• Money metric poverty generation of incomes.
• Capability approach UBA provision of social
  goods.
• Both concerned with absolute poverty, so policy
  response is to raise incomes of the poor and
  enhance capabilities generally (growth is good
  for the poor)
• Money metric capabilities approaches are
  individualistic
• SE focuses on group characteristics.

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Conclusion

• Poverty is multi-dimensional
• Conceptualization measurement have implications
  for policy and for targeting,
• Effective targeting requires a combination of
  different measures for profiling the poor

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Thank you!