Going beyond income

Historically, the World Bank's measure of monetary poverty (known as 'a dollar a day') has been used by international agencies for reporting on and measuring progress towards poverty reduction, in particular towards the UN's Millennium Development Goal of reducing extreme poverty, and it remains the focus of SDG 1.1.  However, the limitations of this money-metric measurement and the minimalist nature of the target are widely recognised. Indeed, there has been a long tradition of viewing poverty as wider than just income.  In 1995, the UN recognised the multi-dimensional nature of poverty (see Absolute and Overall Poverty). The Sustainable Development Goals, while retaining a focus on extreme poverty, have explicit multi-dimensional poverty targets. These targets, in requiring nationally specific goals, also reflect an increasing recognition, that poverty reduction goals should not be just relevant to low-income countries but applicable to all countires across the globe. 

With the adoption by the UN of the Sustainable Development Goals targets for multi-dimensional poverty,  a range of approaches have been developed which have tried to reflect people's living conditions in the context of poverty. These have incorporated core aspects of life commonly held to be a core part of a conception of poverty such as access to basic services (sanitation, water etc), housing conditions, health and education.

Ways of measuring poverty are controversial. 'Measuring Global Poverty' (pdf), the final report of the World Bank commmission on global poverty, sets out a number of principles for such measurement.

The Multidimensional Poverty Index

One measure, widely used, is the Multidimensional Poverty Index (MPI). This index has advantages in widening the measurement of poverty beyond income: it initially covered people’s health (child mortality and nutrition), education (years of schooling and school attendance) and ownership of household assets and has recently been seeking to widen its remit to include others aspects of life such as access to bank accounts, employment and security. The indicators used are derived from the opinions of experts and the current availability of indicators in existing surveys. 

However, it's indicators still tend to be minimalist, primarily relevant to low- and mid-income countries. It has been criticised for its choice of indicators: including the narrowness of their focus, the imposition of the indicators from the outside rather than being obtained through consultation with the public, for confusing indicators that might cause poverty (lack of employment, for example) with those that are an effect of poverty (lack of durable goods, for example), and for the different time frames of the different indicators (for example, lack of schooling being in the past and lack of water in the present)

MPI has also been criticised for the way it aggregates the indicators into an overall measure. This is done through giving the different indicators weights in the overall index.  Detailed critiques have been made of this approach including that the weights given to the different dimensions of poverty are arbitrary. It is argued that it is statiscally and theoretcially problematic to treat as computationally equivalent factors as diverse as the death of a child, having a home withth a dirt floor and not having a television or car.  It has also been criticised for producing a measure that is not a valid or reliable measure of poverty (see ‘The Importance of Reliability and Construct Validity in Multidimensional Poverty Measurement: An Illustration Using the Multidimensional Poverty Index for Latin America (MPI-LA)’ (pdf), Héctor E. Nájera Catalán & David Gordon, Journal of Development Studies, 2019, and ‘Reply to Santos and Colleagues ‘The Importance of Reliability in the Multidimensional Poverty Index for Latin America (MPI-LA)’ (pdf), David Gordon & Héctor E. Nájera Catalán, Journal of Development Studies, 2019)

The consensual approach and international agencies

The consensual approach is being widely explored as an alternative in widening the approach to measuring multi-dimensional poverty.

UNICEF Uganda has been working with the Uganda Bureau of Statistics (UBOS) and a UK research team – led by the University of Bristol and the University of Cardiff, to produce child measures of multi-dimensional deprivation using the consensual approach.  See under Uganda for full details and access to the reports.

On 27 October, 2019, the Pacific Statistics Method Board met to decide on the region's approach to meeting the SDG poverty goals. SDG 1 will be measured using the World Bank's approach while the Board approved in principle to use the Consensual Approach as their recommended method for SDG 1.2.2 for all the countries of the Pacific Islands. See Oceania for more details

More details on the work of the International Agencies in meeting the SDG goals using the consensual approach will be posted shortly.

Author: Joanna Mack