Developing Economies

A Broader Way of Measuring Poverty Proves Controversial

Woman, Niger

hide captionWoman, Niger, November 2009

Ferdinand Reus/Flickr

A new index to measure poverty takes into account not just income but nutrition, living conditions and other factors.

Typically, economists focus on income levels when evaluating what percentage of a given populuation lives in poverty. But the new index's creators at the Oxford Poverty and Human Development Initiative and the United Nations Development Program wanted to provide a more nuanced look at poverty.

Measured by where the highest percentage of people have incomes of $1.25 or less per day, for example, Tanzania is the world's most impoverished country. But measured by the broader group of factors, Niger is the world's impoverished, followed by Ethiopia and Mali. Tanzania is 19th.

Somebody doesn't like this new measure, called the Multidimensional Poverty Index, or MPI. It's the guy the Economist describes as the pioneer of the dollar-a-day methodology, Martin Ravallion, who directs the Development Research Group at the World Bank.

He finds fault with the way the MPI creators weighted the different factors that make up their index. He and the MPI's Sabina Alkire have been debating the issue on aid group Oxfam's blog.

No matter whether you slice it the old way or the new, African countries are far and away the most impoverished. To see fascinating details on the factors the MPI takes into account— like whether a household has a sand, dirt or dung floor and whether residents use wood, charcoal or dung as fuel— click here and look at "Inside the MPI" on page 2.

UPDATE: Typo in first paragraph fixed. Thank you Peter.

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