How a National MPI measures poverty

A national Multidimensional Poverty Index (or national MPI) is a poverty measure that analyses multidimensional poverty in a country according to national definitions. 

Based on the Alkire-Foster method, a national MPI measures multiple indicators of poverty to provide an 'information platform' identifying who is poor, how poor they are and what the nature of their poverty is according to the poverty indicators included. An MPI highlights the overlapping nature of deprivations that people may have and how these differ across communities. The 'dimensions' of an MPI are the conceptual groupings of the 'indicators' which make up the measure and identify the deprivations that people may be experiencing. 

A national MPI provides national figures of poverty, but it can also be unpacked to go deeper and identify multidimensional poverty in regions and districts. It can be used to identify poverty among selected population groups, which can be based on characteristics such as age, sex/gender or ethnicity. 

A national MPI provides information on the population which meets the threshold for poverty. It also sheds light on the deprivations which people who are not poor may be experiencing. This enables policymakers to see where certain deprivations are affecting both poor people and non-poor people in a society. 

In more detail, here are some of the areas that MPIs explore:  

  • Where do the highest proportion of poor people live?   

    The MPI can display the levels of poverty across subnational units or specific groups such as women or children.  

  • Where do people experience the most intense poverty? 

    The MPI can display where people experience the most intense poverty i.e. the highest number of the possible weighted deprivations in the measure.   

  • How fast is poverty reducing or not reducing? 

    The MPI can show which groups are reducing poverty fastest; are the poorest groups or the groups already closest to the poverty line reducing poverty the fastest? How do these groups compare with the national average?   

  • How does poverty compares across subgroups? 

    The MPI can show how poverty compares across groups, for instance are rural or urban areas poorer? Does the nature of their poverty differ and are poor people experiencing deprivations in the same indicators or different indicators?   

  • What indicators contribute most to the MPI nationally and among specific groups?

    The MPI provides an indicator-specific detailed picture of poverty. 

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  • Main statistics of an MPI

    The following statistics are the main headline statistics from a Multidimensional Poverty Index (MPI):  

    • MPI (or MPI value): The MPI value captures the 'incidence' and the 'intensity' of poverty in one headline figure, sometimes called the ‘adjusted headcount ratio’. The MPI value ranges from 0 to 1, with 0 reflecting zero poverty and 1 universal poverty and deprivation. It is always expressed with 3 decimals e.g. 0.235.  
    • Incidence of poverty: The percentage of the population who are multidimensionally poor. Value ranges from 0 to 100%. Sometimes called 'the headcount ratio', 'poverty rate' or 'H'. This is the figure commonly quoted by the media. 
    • Intensity of poverty: The average percentage of the weighted deprivations which poor people are experiencing. 

  • Additional statistics of an MPI

    The following statistics reported by an MPI provide additional detail and a more nuanced picture of poverty: 

    • Number of poor people: The number of people who are identified as multidimensionally poor.  
    • Censored headcount ratio: The proportion of the population who are both multidimensionally poor and are deprived in a given indicator. The censored headcount ratios show which deprivations are affecting poor people the most. 
    • Uncensored headcount ratio: The proportion of the population - both the multidimensionally poor and non-poor - who are deprived in a given indicator. Uncensored headcount ratios show how deprivation in a single indicator affects the population, regardless of whether people are poor or not poor.  
    • Percentage contributions: The relative contribution of each weighted indicator to the overall MPI is shown clearly through this lens.  
    • Absolute contributions: The contribution of each weighted indicator to the MPI. The sum of the absolute contributions of all indicators equals the value of MPI. When comparing populations such as different states, for example, absolute contributions will clearly show the composition of poverty between states relative to each other.  

  • Common dimensions and indicators used in an MPI

    Indicators are the fundamental building blocks of an MPI. They are the specific deprivations which are measured by the MPI. A person is considered multidimensionally poor if they are deprived in a certain percentage of indicators. The number of indicators used, and the weight they carry in the measure, depends on each individual MPI. 

    The selection of the most appropriate indicators is usually influenced by the following criteria:  

    • Participatory consultation to identify the values and perspectives of stakeholders. A variation can be to use existing survey data on people’s perceived necessities.   
    • Values based on international consensus such as the universal declaration of human rights, the Sustainable Development Goals, or similar national and local lists of rights.  
    • Implicit or explicit assumptions about what people do or should value drawn from local convention, social or psychological theory, or philosophy. 
    • Availability or access to the relevant data for a required characteristic.  
    • Empirical evidence on values based on studies of people’s consumer preferences, mental health, social welfare etc.  

    A consensus has emerged among existing national MPIs on including the dimensions of health, education, and living standards. The global MPI is made up of these dimensions. 

    In addition, many national MPIs consider dimensions related to employment, social protection, the quality of the environment, livelihood shocks, and social cohesion.   

    • Health: Two of the most frequently used health indicators are nutrition and food security. Other common health indicators are access (defined as distance) to healthcare; health insurance; and child mortality. 
    • Education: Many national MPIs include both school attendance and at least one indicator on educational attainment – for example the years of schooling completed by adult household members or learning outcomes, such as literacy. Other frequently used indicators include school lag and early childcare, an important indicator of cognitive development, which affects children all their lives.  
    • Water & sanitation:  Many national MPIs include deprivation of an improved source of drinking water and the majority include deprivation of access to improved sanitation. Since these are key features of adequate housing and basic public services, they are often included in dimensions related to living standards. Given that they also offer valuable information about associated health risks, due to contaminated water or lack of adequate sanitation, in some countries these indicators have been included in health dimensions.  
    • Housing, basic public services and infrastructure: Many national MPIs include at least one, and most commonly two or three indicators on housing materials – material of floor, roof, and exterior walls. Other common housing and infrastructure-related indicators include electricity; overcrowding; cooking fuel; assets; land and/or livestock; and garbage disposal. Cooking fuel is also an important health-related indicator, since indoor use of coal, dung, or leaded fuels is associated with ill health.   
    • Employment & social protection: Many national MPIs include at least one employment-related indicator, such as unemployment, informal work and/or otherwise precarious work, such as inadequate pay or sub-employment and/or inadequate employment. Many national MPIs also capture child labour. Together with work-related indicators, a number of national MPIs include indicators related to social protection, such as social transfers, pensions or other forms of social security.  
    • Environment & personal safety: Several national MPIs include indicators on environmental conditions and personal safety – ranging from exposure to hazards and proximity to polluted areas through to physical safety and crime in one’s neighbourhood, to personal security from different forms of violence. 

    For more guidance on selecting dimensions and indicators, read our handbook How to Build a National Multidimensional Poverty Index. 

    For the expanded version of commonly used dimensions and indicators, read this article by Jakob Dirksen in Dimensions magazine.  

Rural poverty

According to the global MPI 2023 which covers 110 countries, 84% of all poor people live in rural areas. Rural areas are poorer than urban areas in every world region. National MPIs can disaggregrate by multiple characteristics - including by rural and urban area - to see how the intensity of poverty and the deprivations experienced might differ between rural and urban locations. 

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