Background to the MPI

History of the MPI

What does it mean to live in poverty? This question has often been answered by lack of income, but the traditional narrow focus on income as the only measure of a person’s wellbeing, or lack of it, is being increasingly challenged. Recent high profile initiatives, such as the Stiglitz-Sen-Fitoussi Commission, have called for broader measures that take account of other vitally important aspects of life.

These initiatives are not alone in this thinking. The human development approach has long argued that although income is important, it has limitations that call for more direct measures. The 1997 United Nations Development Programme’s flagship Human Development Report (UNDP HDR) introduced the Human Poverty Index (HPI), which measured multiple deprivations in key aspects of human development. UNDP researchers concluded that the HPI had limited utility because it aggregated average deprivation levels for each dimension and thus could not be linked to any specific group of people.

In its 20th anniversary year, the UNDP Human Development Report (UNDP HDR) decided to introduce a new international measure of poverty – the Multidimensional Poverty Index or MPI – which directly measures the combination of deprivations that each household experiences. The MPI uses microeconomic data to reflect the percentage of households that experience overlapping deprivations in three dimensions—education, health and living conditions.

The new MPI was developed and applied by OPHI with UNDP support and supplants the HPI. Sabina Alkire and Maria Emma Santos designed the MPI using a technique for multidimensional measurement created by Sabina Alkire and James Foster. In 2010, OPHI analysed poverty across 78% of the world’s people in 104 developing countries using the MPI and released the results in advance of the 2010 HDR. Forty-six researchers in 13 countries in both the developed and developing world worked on the project. The 2011 MPI took this total to 109 countries.

From their inception, the UNDP HDRs have pioneered new ways to analyse human development and poverty, intended to have a direct impact on development strategy and methodology. By featuring this independently conceived new approach to poverty measurement in the 20th anniversary report, UNDP HDR hopes to encourage its use in the field by governments, development agencies, and other institutions dedicated to the eradication of poverty.

What is the MPI?

The lives of people living in poverty are affected by more than just a lack of income. The Multidimensional Poverty Index (MPI) complements income poverty measures by reflecting the deprivations that each poor person faces all at once with respect to education, health and other aspects of living standards. It assesses poverty at the individual level, with poor persons being those who are multiply deprived, and the extent of their poverty being measured by the range of their deprivations.

The MPI can be broken down to show a vivid picture of people living in poverty, both across countries, regions and the world and within countries by ethnic group, urban/rural location, or other key household characteristics. It is the first international measure of its kind, and offers a valuable complement to income poverty measures because it measures deprivations directly. The MPI can be used as an analytical tool to identify the most vulnerable people, show aspects in which they are deprived and help to reveal the interconnections among deprivations. This enables policy makers to target resources and design policies more effectively. Other dimensions of interest, such as work, safety, and empowerment, could be incorporated into the MPI in the future, as data become available. OPHI is currently conducting research to collect and analyse internationally comparable data on these ‘missing dimensions’ of poverty.

The MPI reports acute poverty for 109 countries.

What does the MPI measure?

The MPI uses 10 indicators to measure three critical dimensions of poverty at the individual level: education, health and living standard in 109 developing countries. These directly measured deprivations in health and educational outcomes as well as key services such as water, sanitation, and electricity reveal not only how many people are poor but also the composition of their individual poverty. The MPI also reflects the intensity of poverty – the sum of weighted deprivations that each person faces at the same time. A person who is deprived in 70% of the indicators is clearly worse off than someone who is deprived in 40% of the indicators.

Why is the MPI useful?

The MPI is a high resolution lens on poverty. Knowing not just who is poor but how they are poor is essential for effective human development programmes and policies. This straightforward yet rigorous index allows governments and other policymakers to understand the various sources of poverty for a region, population group, or nation and target their human development plans accordingly. The index can also be used to show shifts in the composition of poverty over time so that progress, or the lack of it, can be monitored.

The MPI goes beyond previous international measures of poverty to:

  • Show all the deprivations in the selected indicator that impact someone’s life at the same time – so it can inform a holistic response.
  • Identify the poorest people. Such information is vital to target people living in poverty so they benefit from key interventions.
  • Show which deprivation combinations are most common in different regions and among different groups, so that resources can be allocated and policies designed to address their particular needs.
  • Reflect the results of effective policy interventions quickly. The MPI will immediately reflect changes in any of its indicators such as school attendance so can be used to monitor progress.
  • Integrate many different aspects of poverty related to the MDGs into a single measure, to give an overview of its component changes, to reflect interconnections among deprivations and to help identify poverty traps.

Who can use the MPI?

  • Governments
  • Non-Governmental organisations
  • Private sector institutions
  • Civil society groups and advocacy groups
  • Academics and researchers

How was the MPI created?

The MPI was created using a technique developed by Sabina Alkire and James Foster. The Alkire Foster method measures outcomes at the individual level (person or household) against multiple criteria (dimensions and indicators). The method is flexible and can be used with different dimensions and indicators to create measures specific to different societies and situations. For example, it can be applied to measure poverty or wellbeing, target services or conditional cash transfers and for monitoring and evaluation. The method can show the incidence, intensity and depth of poverty, as well as inequality among the poor, depending on the type of data available to create the measure. Read our policy page for more information on the method and the countries that have adopted it.

The specific indicators, cutoffs and weights employed by the MPI were chosen in a long process of consultation, study and fieldwork. The MPI indicators are the best combination possible to compare the 109 countries, given currently available data, and resonate with the Millennium Development Goals.

The MPI was created using a technique developed by Sabina Alkire and James Foster. The Alkire Foster method measures outcomes at the individual level (person or household) against multiple criteria (dimensions and indicators). The method is flexible and can be used with different dimensions and indicators to create measures specific to different societies and situations. For example, it can be applied to measure poverty or wellbeing, target services or conditional cash transfers and for monitoring and evaluation of programmes. The method can show the incidence, intensity and depth of poverty, as well as inequality among the poor, depending on the type of data available to create the measure. Read our policy page for more information on the method and the countries that have adopted it.

The specific indicators, cutoffs and weights employed by the MPI were chosen in a long process of consultation, study and fieldwork. The MPI indicators are the best combination possible to compare the 109 countries, given currently available data, and resonate with the Millennium Development Goals.

What next?

  • National measures: Governments can tailor the MPI to the indicators and cutoffs that are most appropriate in their country and use it to complement income poverty.
  • NGOs and Private Sector: These institutions can adapt the MPI to their context and use it for monitoring and accounting for the impacts of their work.
  • Targeting: Programmes that are targeting conditional cash transfers, or other social programmes can adapt the MPI to identify the people whose poverty is most intense, so the programmes reach them first.
  • More and better data: The MPI is restricted because we do not have internationally comparable data from the same surveys for other dimensions that might be useful such as safety from violence, work, the environment, empowerment, social relationships, and culture.
  • Updated data: Ideally the MPI would use very recent internationally comparable data, and these would be updated frequently. Given data contraints, the MPI is based on the most up to date figures from DHS and MICS surveys 2000-2010. As more data are released the MPI will be updated.

Read more about the MPI on the MPI Resources page.