A New Approach to Poverty Measurement in Latin America

View papers, podcasts and presentations available on the ECLAC website

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The Chilean Government examined proposals to move to a new multidimensional approach to poverty measurement last week. The new approach, developed by researchers Sabina Alkire and James Foster at the Oxford Poverty and Human Development Initiative, University of Oxford, goes beyond the traditional narrow focus on income to use a suite of additional indicators, such as health, housing, education and access to food, to determine who is poor.

The proposals were discussed by international and national experts during the International Seminar: Multidimensional Poverty Measurement in Latin America, organized by the Chilean Ministry of Planning (MIDEPLAN), the UN Economic Commission for Latin America and the Caribbean, the Chilean Foundation for Overcoming Poverty and OPHI at ECLAC’s headquarters in Santiago on 13-14 May.

The International Seminar was oversubscribed, with more than 320 participants, including policy makers, practitioners and academics, from all over Latin America. Government representatives from thirteen countries attended, as well as representatives from international agencies, such as the United Nations Development Programme, UNICEF, the European Union and the Inter-American Development Bank.

The initiative signifies growing interest in multidimensional poverty in Latin America. Last year, the Mexican Government became the first country to implement a national poverty measure that reflects the intensity of poverty at the household level, when they adopted OPHI’s measurement method. Other countries in the region are exploring the possibility of using this or related methods.

Speaking at the seminar, Chile’s Minister for Planning, Felipe Kast, said efforts should not only be theoretical, but should be translated into social policy.

Why use a multidimensional poverty measure?
Traditionally, measures of poverty and well-being have relied on monetary indicators such as income or Gross Domestic Product (GDP). But such metrics can miss a lot. For example, income poverty has fallen in India. In contrast, the prevalence of child malnutrition has remained at nearly 50%. A multidimensional approach considers households to be poor if they are deprived in several different ‘dimensions’ simultaneously (e.g. education, health, nutrition, housing and income) that contribute towards a person or nation’s welfare.

The Alkire Foster method: OPHI’s method for multidimensional poverty measurement
Sabina Alkire, OPHI Director, and James Foster, OPHI Research Associate and professor of economics and international affairs at George Washington University, have created the first method for measuring multidimensional poverty that reflects the intensity of poverty at the household level. It not only tells us the proportion of people who are poor, but also how many deprivations poor people suffer at the same time. The method distinguishes between a group of people who are deprived in one dimension out five, and a group of people who are deprived in five out of five dimensions.

The Alkire Foster method can be used with different dimensions and indicators to create measures of poverty and wellbeing that are appropriate to different situations and societies. For example, the Mexican Government used national survey data to create their new national poverty measure that includes education, access to healthcare, access to social security, basic services at home, access to food, income and the degree of social cohesion. Read more on Mexico’s new national measure here.

The method can also be broken down to show what the major components of poverty are among different groups of people. For example, in Mexico the national rate of extreme multidimensional poverty (defined as at least three deprivations plus insufficient income) is 10.5 percent with an average of 3.9 deprivations, whereas among the indigenous people of Mexico the rate for extreme multidimensional poverty is 39.2 percent with an average of 4.2 deprivations.

How is the Alkire Foster method calculated?
The Alkire Foster method uses an intuitive counting methodology, which is easy to calculate. For further information on how the measure is calculated read OPHI’s poster and ‘Counting and Multidimensional Poverty’ by Alkire and Foster.

About OPHI (Oxford Poverty & Human Development Initiative)
OPHI is a research centre within the Department of International Development at the University of Oxford. OPHI is led by Sabina Alkire and works to develop and apply new ways to measure and analyse poverty, human development and welfare, drawing on the work of Nobel Laureate economist Amartya Sen. Sabina Alkire and James Foster have developed a multidimensional methodology for measuring poverty, the Alkire Foster measure. James Foster is a Research Associate at OPHI and a Professor of Economics and International Affairs at George Washington University.

Media Coverage

ESTRATEGIA – EL DIARIO DE NEGOCIOS DE CHILE – Recomiendan Medición Multidimensional de la Pobreza en Chile

El Mercurio – Experts from the University of Oxford present a new method for measuring poverty

La Tercera – Cepal afirma que es imperioso redefinir manera de medir la pobreza

Erbol – CEPAL propone priorizar la igualdad y redefinir la pobreza

Radio Chile – Ministro Kast recalca importancia de creación de ministerio de Desarrollo Social

Santiago Times – Chile’s Experts Re-evaluate National Poverty Line

Merco Press – Chilean officials reluctant to review poverty definition fearing higher percentages

ECLAC Press Release

Papers and Presentations

Papers, presentations and podcasts from the International Seminar on  Multidimensional Poverty Measurement in Latin America are available from the ECLAC website.