Meaningful Measures of Poverty in 2010: Mexico and Beyond

A new multidimensional poverty measure co-developed by OPHI researchers was adopted by the Mexican government last month. It is the first national model to reflect the full breadth of poverty at the household level, including social factors such as health, housing, education and access to food, as well as income. OPHI Director Sabina Alkire and OPHI Research Associate James Foster created the technique, which Mexico has drawn on and adapted to their own context.

Traditionally, measures of poverty and well-being have relied on monetary indicators, such as income or Gross Domestic Product (GDP). But such narrow metrics only capture part of the picture. “Poverty and wellbeing are multidimensional concepts that involve all aspects of a person’s experience of life,” said Sabina Alkire. “To combat poverty effectively, we need to understand its causes. Our measure not only identifies who is poor and how poor they are, it tells us what the major drivers of poverty are among different groups of people. For example, access to drinking water may rank as the major contributor to poverty in rural areas of a country, whereas poverty in urban areas may be driven by education. This information is highly valuable for policy makers in deciding where to focus resources.”

Mexico’s new measure was launched on Thursday 10 December 2009 in Mexico City by Mexico’s National Council for the Evaluation of Social Policy (CONEVAL). “Mexico is proud to be the first country in the world to measure poverty, not narrowly on economic grounds alone, but to take full account of crucial social components of poverty such as quality of housing and access to healthcare and food, which are all too often neglected by established poverty measures,” said Dr Gonzalo Hernández Licona, Executive Secretary of CONEVAL.

The Mexican government is one of several high-profile institutions to recognise the need for wider measures to provide more relevant information for policy makers. Last September French president Nicolas Sarkozy commissioned a report by an expert panel, including Joseph Stiglitz and Amartya Sen, to look at how governments can take full account of citizen’s wellbeing, not just national economic growth. Bhutan employed Alkire and Foster’s multidimensional method to create the country’s aptly named ‘Gross National Happiness’ Index. The index incorporates nine dimensions, as diverse as health, culture, time use and environmental diversity, and demonstrates the versatility of Alkire and Foster’s measure: because it allows you to choose which dimensions and indicators are used it can be adapted to a huge variety of situations.

Interest in this multidimensional approach in 2010 looks set to grow. Chile will hold an international conference on ‘Measuring Multidimensional Poverty in Latin America’ during March; closed by the Chilean President, Michelle Bachelet. OPHI, the Chilean Government’s Ministry of Planning and the Foundation for Overcoming Poverty are partnering with the Economic Commission for Latin America and the Caribbean to organise the meeting. Internationally, the United Nations Development Programme (UNDP) has commissioned OPHI to use the Alkire Foster measure to evaluate multidimensional poverty across more than 100 countries for its 2010 Human Development Report.

For more information:

The Alkire Foster Measure
Read
-a policy oriented summary on the AF measure
-the original method, Alkire and Foster 2007.
-the updated and revised paper,Alkire and Foster 2009
Read OPHI’s background paper to the Sarkozy Commission Report  ‘The Capability Approach and Quality of Life Measures’.