Policy and the Alkire-Foster method

The Alkire-Foster Method

The Alkire-Foster (AF) method, developed by Sabina Alkire and James Foster at OPHI, is a flexible technique for measuring poverty or well-being. It can incorporate different dimensions and indicators to create measures specific to particular contexts. This means the method can be used in several different ways:

  • Poverty and wellbeing measures. The AF 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 context. For example, the AF method is used to construct the global MPI that features in UNDP’s flagship Human Development Reports, and would underlie the MPI2015+ proposed for the post-2015 development context. It has also been adapted by countries including Mexico, Colombia and Bhutan to create their national measures of poverty or well-being.
  • Monitoring and evaluation. The AF method can be used to monitor the effectiveness of programmes over time. For example, to monitor the effectiveness of a fair-trade programme, a measure could be constructed with criteria such as wages, length of contract, quality of produce, timeliness of delivery, number of people, and so on, to show at a glance which programme is doing best and in which area. See the Women’s Empowerment in Agriculture Index, which measures the empowerment, agency and inclusion of women in the agriculture sector.
  • Targeting poor people as beneficiaries of services or conditional cash transfers. The AF method can also be used to target individuals for public service programmes or conditional cash transfers (CCTs) against set criteria.

Read about local, national and international policy applications of the AF method.

What are the benefits of the AF method to policy makers?

The Alkire-Foster method can be used by NGOs, governments, agencies and the private sector to create measures that have several uses and advantages:

  • Effective allocation of resources. With the Alkire-Foster method, policymakers can identify the poorest people and the aspects in which they are most deprived. This information is vital to investing resources where they are likely to be most effective at reducing poverty.
  • Policy design. Policymakers can identify which deprivations constitute poverty, and which are most common among and within groups, so that policies can be designed to address particular needs.
  • Identifying interconnections among deprivations. The Alkire-Foster method integrates many different aspects of poverty into a single measure, reflecting interconnections among deprivations and helping to identify poverty traps.
  • Showing impacts over time. The method can be quicker to reflect the effects of changes in policies than income alone. For example, if a new social programme aimed at increasing good education is introduced to an area, it will be a long time before any positive benefit in returns from education are reflected in an income measure. In contrast, a multidimensional poverty measure that includes child enrolment and achievement could reflect a reduction in this aspect of poverty relatively quickly, because it is measuring it directly.
  • Flexibility. Different dimensions, indicators and cutoffs can be used to create measures tailored to specific uses, situations and societies. These can be chosen through participatory processes. The method can be used to create poverty measures, to target poor people as beneficiaries of Conditional Cash Transferes (CCTs) or services, and for the monitoring and evaluation of programmes.
  • Complementing other metrics. Multidimensional measures can complement other measures of poverty, such as income. Alternatively they can incorporate income as one dimension of several within a multidimensional measure.

How is the AF Method different from other composite measures?

The Alkire-Foster method works from people up. By mapping outcomes for each individual or household against the criteria being measured, the method captures both the percentage of people who are poor and the overlapping deprivations that each individual or household faces. This is unique to the Alkire-Foster method, and has important advantages:

  • Measures created using the technique reflect the intensity of poverty (the average number of deprivations or weighted sum of deprivations that each individual experiences).
  • Measures created using the technique are transparent: they can be broken down quickly and easily by region or by social group.