Alkire Foster Method
OPHI’s method for multidimensional measurement
Intuitive and easy to calculate
Sabina Alkire and James Foster have created a new method for measuring multidimensional poverty. It includes identifying ‘who is poor’ by considering the range of deprivations they suffer, and aggregating that information to reflect societal poverty in a way that is robust and decomposable. For free online video guides on how to use the Alkire-Foster method, see OPHI’s new online training portal.
Contemporary methods of measuring poverty and wellbeing commonly generate a statistic for the percentage of the population who are poor, a head count (H). The Alkire Foster Method generates a headcount and also a unique class of poverty measures (Mα):
M0 An ‘adjusted head count’. This reflects both the incidence (the percentage of the population who are poor) and intensity of poverty (the number of deprivations suffered by each household, A). It is calculated by multiplying the proportion of people who are poor by the percentage of dimensions in which they are deprived (M0 = H x A).
M1 This measure reflects the incidence, intensity and depth of poverty. The depth of poverty is the ‘gap’ (G) between poverty and the poverty line (M1 = H x A x G).
M2 This measures reflects the incidence, intensity, depth of poverty and inequality among the poor (the squared gap, S) (M2 = H x A x S).
M0 can be calculated with ordinal and cardinal data. Cardinal data are required to calculate M1 and M2.
The Alkire Foster Method is unique in that it can distinguish between, for example, a group of poor people who suffer only one deprivation on average and a group of poor people who suffer three deprivations on average at the same time.
This flexible approach can be employed in a variety of situations by choosing different dimensions (e.g. education), indicators (e.g. how many years of education a person has) and cutoffs (e.g. a person with fewer than five years of education is considered deprived).
Common uses of the Alkire Foster Method
- Poverty measures. The Alkire Foster method can be used to create national, regional or international measures of poverty or wellbeing by incorporating dimensions and indicators that are tailored to the specific context.
- Targeting of services or conditional cash transfers. The Alkire Foster method can be used to target people who meet multiple criteria.
- Monitoring and evaluation. The Alkire Foster method can be used to monitor the effectiveness of programmes over time.
Why the Alkire Foster Method is useful
The Alkire Foster method is a single societal poverty measure, but it can be broken down and analysed in a powerful way to inform policy. It can be used to:
- Break down by population group. the measure can be broken down (decomposed) by geographic area, ethnicity, or other groups, to show the composition of poverty within and among the groups.
- Break down by dimension/indicator. the measure can be broken down (decomposed) after identification to show which deprivations are driving poverty among and within groups.
- Compare across time. the measure can be used to monitor changes in poverty and the composition of poverty over time using time series or panel data. The Alkire Foster method reflects other dimensions directly and changes immediately as these change. This makes it an effective monitoring tool because improvements in the dimensions measured, such as health and education, are reflected quickly.
- Target the poorest groups and beneficiaries of conditional cash transfers, district interventions or public programmes. The targeting tool can be broken down to show the indicators in which they are most deprived.
- Complement other metrics. The Alkire Foster Method can complement other measures, such as income poverty.