Towards a Global Assets Indicator: Re-assessing the Assets Indicator in the Global Multidimensional Poverty Index

OPHI Research in Progress

This paper demonstrates how the revised assets indicator of the updated global Multidimensional Poverty Index (global MPI), launched in September 2018, consolidated and improved the measurement of assets deprivation at the global level. The revision combines normative and statistical methods to assess the validity of the 7-item assets schedule contained in the Original MPI, jointly designed by the Oxford Poverty and Human Development Initiative and the UNDP Human Development Report Office (HDRO) in 2010, and an 11-item schedule of an Experi­mental MPI, which was developed by the UNDP HDRO in 2014. It also analysed whether the inclusion of additional items identified in a review of over 100 Demographic and Health Surveys, Multiple Indicators Cluster Surveys and national surveys from which the global MPI is constructed, would add value to a revised assets indicator. Drawing on the analytical framework developed for the European Union material deprivation indicator, complemented by normative assessment, this paper applies tetrachoric exploratory factor analysis, multiple correspondence analysis, classical test theory, item response theory and alternative measures to identify a set of items that proxy assets deprivation globally. In using a set of 26 purposefully selected countries, test results were used to rule out infeasible assets, and finally to justify the addition of computer and animal cart to the assets schedule of the Original MPI. Based on this statistically validated expansion, and greater reliability of the items in the schedule, we conclude that the consolidated and revised indicator measures assets deprivation more accurately at the global level.

Citation: Vollmer, F. and Alkire, S. (2020). ‘Towards a global asset indicator: Re-assessing the asset indicator in the global Multidimensional Poverty Index’, OPHI Research in Progress 53b, Oxford Poverty and Human Development Initiative (OPHI), University of Oxford.

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A later version of this paper has been published as ‘Consolidating and improving the assets indicator in the global Multidimensional Poverty Index’, World Development, October 2022, Vol. 158, paper No. 105997.

See also OPHI Research in Progress 53a.

assets, Assets Index design, global Multidimensional Poverty Index, MPI, poverty measurement, welfare.

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Frank Vollmer and Sabina Alkire
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OPHI Research in Progress
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RP 53b