“Rethinking Human Development_ Part One” Concept and relations

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“Rethinking Human Development_ Part One” Concept and relations Powered By Docstoc
					Multidimensional Poverty Index

          Milorad Kovacevic
    Human Development Report Office
            Multidimensional Poverty Index

• The dimensions of poverty go far beyond inadequate
  income—to
  –   poor health and nutrition,
  –   low education and skills,
  –   inadequate livelihoods,
  –   bad housing conditions,
  –   social exclusion and lack of participation




        Workshop on HD Approach and Measurement for the GCC States, Doha, 9-11 May, 2011   2
            Multidimensional Poverty Index

• HDR 2010, in collaboration with Oxford University’s Poverty
  and Human Development Initiative, introduced a new
  Multidimensional Poverty Index (MPI)

   – only for 104 developing countries (due to lack of comparable data)
   – The 104 countries include 92% of the population in 98 developing
     countries
   – in 2011 – at most 120

• The MPI is an index of acute multidimensional poverty and is
  meant to complement monetary based measures


       Workshop on HD Approach and Measurement for the GCC States, Doha, 9-11 May, 2011   3
  Dimensions of the Multidimensional Poverty Index
• MPI identifies overlapping deprivations at the household level
• Composed of 10 indicators corresponding to the same 3 dimensions
  as the HDI: Health, Education and Living Standards
       - Each dimension is equally weighted
       - Each indicator has equal weight within its dimension




                                                                     4
  Dimensions of the Multidimensional Poverty Index

• The MPI shows the average number of poor people and
  the average number of deprivations with which poor
  households contend

• A household is multidimensionally poor if it is deprived in
  at least 30% of the weighted indicators (2 to 6 indicators)

• The MPI reveals a different pattern of poverty than
  income poverty
   – it illuminates a different set of deprivations



       Workshop on HD Approach and Measurement for the GCC States, Doha, 9-11 May, 2011   5
                                Data Sources

Data: Household Surveys
‐ Demographic & Health Surveys (DHS – 48 countries)
‐ Multiple Indicator Cluster Surveys (MICS – 35 countries)
‐ World Health Survey (WHS – 19 countries)
   ‐ Additionally used 2 special surveys covering Mexico and
     urban Argentina

   ‐ WHS 2003 for United Arab Emirates

‐MPI is deeply affected by lack of comparable data
    Workshop on HD Approach and Measurement for the GCC States, Doha, 9-11 May, 2011   6
                                 Methodology
• MPI corresponds to the first measure of the Alkire & Foster
(2007) family of multidimensional poverty measures, called M0

• It is constructed using the AF method:




        Workshop on HD Approach and Measurement for the GCC States, Doha, 9-11 May, 2011   7
                                Methodology
• Two step procedure applied to identify who is
  multidimensionally poor, uses dual cutoff method:

   1. Identify all individuals deprived in any dimension
      •    Within dimension cutoff

   2. Identify who is multidimensionally poor
      •    Cross dimensional cutoff
           –     Deprived in at least 30% of the weighted indicators




      Workshop on HD Approach and Measurement for the GCC States, Doha, 9-11 May, 2011   8
       Measurement Indicators and Cutoffs

Health (each indicator weighted equally at 1/6 )
   - Child Mortality: If any child has died in the family

   - Malnutrition: If any interviewed adult in the family
   has low Body Mass Index; if any child is more than 2
   standard deviations below the reference normal weight
   for age, (WHO standards)
   [WHS has male data but no child data; MICS has child
   data but no adult data]

       Workshop on HD Approach and Measurement for the GCC States, Doha, 9-11 May, 2011   9
       Measurement Indicators and Cutoffs


Education (each indicator weighted equally at 1/6 )
   - Years of Schooling: if no person in the household
   has completed 5 years of schooling

   - Child Enrolment: if any school-aged child is out of
   school, where school-aged is an 8 year period from
   the national starting age


                        Workshop on HD Approach and
                    Measurement for the GCC States, Doha, 9-   10
                                11 May, 2011
        Measurement Indicators and Cutoffs

Standard of Living (each indicator weighted equally at 1/18)
   - Electricity (no electricity is poor)
   - Drinking water (MDG definitions)
   - Sanitation (MDG definitions + not shared)
   - Flooring (dirt/sand/dung are poor)
   - Cooking Fuel (wood/charcoal/dung are poor)
   - Assets (poor if do not own a car/truck and do not
       own more than one of these: radio, tv, telephone,
       bike, motorbike, or refrigerator)
                         Workshop on HD Approach and
                     Measurement for the GCC States, Doha, 9-   11
                                 11 May, 2011
                          Illustration

• Ali’s household is deprived in nutrition and child enrolment. Is
  Ali’s household multidimensionally poor?
        10(1/6)+10(1/6) = 3.34 (> 3) Yes
• Maira’s household is deprived in electricity, water, sanitation,
  and has a dirt floor. Is Ali’s household multidimensionally
  poor?
        10(1/18)+10(1/18) + 10(1/18)+10(1/18) = 2.20 (<3) No
• Tom’s household is deprived in years schooling, sanitation,
  assets, and cooking fuel. Is Tom’s household
  multidimensionally poor?
        10(1/6)+ 10(1/18)+10(1/18) + 10(1/18)= 3.33 (>3) Yes
                           Workshop on HD Approach and
                       Measurement for the GCC States, Doha, 9-   12
                                   11 May, 2011
                       Missing Dimensions


Missing dimensions include:
•   Work
•   Empowerment
•   Safety from Violence (crime, conflict)
•   Political Freedom
•   Relationships (social capital, inclusion, dignity)
•   (Cultural/Spiritual/Subjective Well-being)

Data are not available to incorporate any of these into the MPI for 100+ countries

                                Workshop on HD Approach and
                            Measurement for the GCC States, Doha, 9-             13
                                        11 May, 2011
    Patterns of Multidimensional Poverty

• 32% the population in 104 developing countries, about
  1.75 billion people, are MPI poor
   – The 104 countries includes 92% of the population in 98
     developing countries

• Regional rates vary from 3% in Europe and Central Asia to
  65% in sub-Saharan Africa

• South Asia is home to the largest number of MPI poor,
  followed by sub-Saharan Africa

                        Workshop on HD Approach and
                    Measurement for the GCC States, Doha, 9-   14
                                11 May, 2011
        Patterns of Multidimensional Poverty
Half the world’s MPI poor live in South Asia, but the intensity of
MPI poor is highest in sub-Saharan Africa


Eight Indian states are
home to 421 million
MPI poor people -
more than the 410
million poor living in
the 26 poorest African
countries combined


                              Workshop on HD Approach and
                          Measurement for the GCC States, Doha, 9-   15
                                      11 May, 2011
        Patterns of Multidimensional Poverty
Countries with higher multidimensional poverty headcounts tend to
have more deprivations




     Workshop on HD Approach and Measurement for the GCC States, Doha, 9-11 May, 2011   16
         Patterns of Multidimensional Poverty
  South Asia has highest incidence of multidimensional poverty in
  the world-ranging from 38.7% in Sri Lanka to 54.1% in Nepal

Sub-Saharan Africa has
significant variation–                          MPI poor population
ranging from 3% in South                            (millions)
Africa to 93% in Niger         1000
                                800
East Asia and the Pacific       600
has relatively low rates of     400
                                200
multidimensional
                                  0
poverty– but over half of               East Asia and the         Sub-Saharan   South Asia
Cambodians are MPI poor                      Pacific                 Africa


                                  Workshop on HD Approach and
                              Measurement for the GCC States, Doha, 9-                       17
                                          11 May, 2011
         Patterns of Multidimensional Poverty
Europe and Central Asia’s incidence of Multidimensional poverty is
lowest of the developing country regions – close to zero in several
countries, while Tajikistan is the highest with 17%

          MPI poor population                                       Arab states MPI values are
              (millions)                                            generally below 7%, but
 60                                                                 as high as 52% in Yemen
 50
 40                                                                 and 81% in Somalia
 30
 20                                                                 Latin America and
 10
  0                                                                 Caribbean MPI values
       Central and     Arab States     Latin America                range from 2% (Uruguay)
      Eastern Europe                   and Caribbean
       and the CIS                                                  to 57% (Haiti)
                                  Workshop on HD Approach and
                              Measurement for the GCC States, Doha, 9-                    18
                                          11 May, 2011
        Patterns of Multidimensional Poverty
United Arab Emirates (WHS 2003)

 MPI        H        @ Risk At least one severe deprivation
                     A
                      (1)   Education Health       Living
                                                 Standard
0.002     0.6% 35.3% 2.0%     0.6%      5.4%       0.0%
       (1) Suffering in 20% of weighted indicators




                                Workshop on HD Approach and
                            Measurement for the GCC States, Doha, 9-   19
                                        11 May, 2011
      Patterns of Multidimensional Poverty
The MPI highlights significant variations:
Within-countries
 – Nairobi is similar to
   Dominican Republic, rural
   northeast is worse than
   Niger

Among ethnicities,
religions and castes
 – MPI headcount in Kenya
   ranged from 29% for the
   Embu to 96% for the
   Turkana and Masai

                              Workshop on HD Approach and
                          Measurement for the GCC States, Doha, 9-   20
                                      11 May, 2011
                                         Changes Over Time
MPI at two points in time in Bangladesh, Ethiopia and Ghana
       1
     0.9
     0.8
     0.7
     0.6
     0.5
     0.4
     0.3
     0.2
     0.1
       0
                                                            A - 2004
                                                                       A - 2007




                                                                                                                                 A - 2000
                                                                                                                                            A - 2005




                                                                                                                                                                                                       A - 2003
                                                                                                                                                                                                                  A - 2008
            MPI - 2004
                         MPI - 2007




                                                                                                                                                       MPI - 2003
                                                                                                                                                                    MPI - 2008
                                                                                  MPI - 2000
                                                                                               MPI - 2005
                                      H - 2004
                                                 H - 2007




                                                                                                                                                                                 H - 2003
                                                                                                                                                                                            H - 2008
                                                                                                            H - 2000
                                                                                                                       H- 2005




                                      Bangladesh                                                              Ethiopia                                                           Ghana

     Workshop on HD Approach and Measurement for the GCC States, Doha, 9-11 May, 2011                                                                                                                                        21
        Relevance to Country Level Work

• Can be adapted using indicators and weights that
  make sense for the region or the country
• Can be adopted for national poverty eradication
  programs
• It can be used to study changes over time




                     Workshop on HD Approach and
                 Measurement for the GCC States, Doha, 9-   22
                             11 May, 2011
                   Policy Applications

• Allocate resources effectively
   • Target those with the greatest intensity of poverty
• Identify interconnections among deprivations
   • Helps in addressing MDGs strategically
• Design policy
   • Show which deprivations are most common in different
     groups so that policies can be tailored to particular needs
• Show impacts
   • Reflects results of policy interventions quickly


                         Workshop on HD Approach and
                     Measurement for the GCC States, Doha, 9-   23
                                 11 May, 2011
Limitations of the Multidimensional Poverty Index

• Drawbacks mainly due to data constraints
   • Indicators include inputs, outputs and one stock indicator
     because flow data unavailable in some instances
   • Health data relatively weak
   • Judgments necessary where data is missing
• Intrahousehold inequality is not captured
• Does not measure inequality amongst the poor
• Cross-country comparability limited




                          Workshop on HD Approach and
                      Measurement for the GCC States, Doha, 9-    24
                                  11 May, 2011
Criticism of the Multidimensional Poverty Index

Martin Ravallion’s recent criticism:
•   Arbitrariness of components and weights.
•   Income based measures aggregate consumption across a large number of goods.
•   Limited information about trade-offs.
•   Uncertainty about robustness of resulting rankings.


Responses
•   Giving income weight of one is no less arbitrary.
•   Prices reflect scarcities and current distribution.
•   Indices can and should enable reasoned public debate about the implicit weights
    and trade-offs.
     • Contention of HDR approach is that since education and health are public
         goods, current prices underestimate their social value.
•   MPI background research exhaustively evaluated robustness

                                Workshop on HD Approach and
                            Measurement for the GCC States, Doha, 9-              25
                                        11 May, 2011

				
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