Strengths And Weaknesses Of Multidimensional Indicators Of Poverty

Summary: This paper reviews some available literature on the Multi-dimensional indicators of poverty as defined by the UNDP in the human development report as the Human Poverty Index and identifies the strengths and weakness of these multi-dimensional indicators. An introduction to the poverty issue and a conclusion on the subject are also included.

Introduction: Poverty has been always in existence and will countries to exist in a large number of countries worldwide, and it’s a major issue in today’s world to reduce and eliminate the poverty worldwide and in fact poverty reduction and elimination is one of the main Millennium Development Goals, MDG set by the United Nations, of the world’s 6 billion people, 2.8 billion, almost half live on less than $2.0 a day, and 1.1 billion, a fifth, live on less than $1.0 per day as reported by UNDP in 2006.

To understand the threat of the problem of poverty process, it is necessary to know its dimension and the process through which it seems to be deepened. It is always been understood that a person is said to be poor if his / her income falls below the poverty line. In today’s complex world, poverty is becoming more complex to tackle and it involves multi dimensional indicators in order to assess poverty and implement policies to reduce and eliminate poverty . Thus the well-being of a population, and hence its poverty, which is a manifestation of insufficient well-being, depend on both monetary and non-monetary variables. It is a fact that high income may improve the position of a person monetary and non-monetary attributes, however at the same time, the markets for some non-monetary attributes do not exist, and this will imply that the higher income of the person may not help the well being.

Therefore, income as the sole indicator of well-being is inappropriate and should be supplemented y other attributes or variables, such as housing, literacy, life expectancy, provision of public goods and others. The Human Poverty Index, HPI was first introduced into the Human Development Report by the UNDP in 1997 in an attempt to bring in a composite index the different feature of deprivation in the quality of life to arrive at an aggregate judgment on the extent of poverty in the developing countries. The Human poverty index HPI, measures deprivations in the three basic dimensions of human development captured in the HDI:

A long and healthy life – vulnerability to death at a relatively early age, as measured by the probability of birth of not surviving to age forty.

Knowledge / Education – Exclusion from the world of reading provisioning, as measured by the un weighted average of two indicators, the percentage of the population not using an improved water source and the percentage of children under weight-for-age.

A decent standard of living / lack of essential services – lack of access to overall economic provisioning, as measured by the un weighted average of two indicators, the percentage of the population not using a improved water source and the percentage of children under weight for age.

Since the arrival of the HPI in 1997, multi-dimensional poverty indicators have risen to prominence and party due to the demand of the human development approach, Amartya Sen and others writing regarding the importance of expanding different capabilities. Better poverty measures are in demand and efficient poverty indicators are needed to analyze the interconnections between different kinds of deprivations that trap poor people in poverty.

The increased interest and demand in the multi-dimensional poverty indicators and measures is driven by three main criteria’s:

National poverty measures: Income based poverty lines are considered insufficient in many countries due to the many external factors and states need additional indicators in order to better assess the well-being and / or deprivation of their people over time.

Identification of beneficiaries and selecting the appropriate programs: Certain public services are reserved for the poor, and programs based on income data can be error-ridden, thus multi-dimensional measures can be more effective and more reliable.

Evaluation and monitoring of progress: Multi-dimensional measures can be developed and designed for monitoring and evaluation, and can promote for better assessment the impacts of the implemented policies and programs.

Poverty is defined as hunger, lack of shelter, being sick and not being able to see a doctor, not able to go to school, not knowing how to read, not having a job, is fear of the future, living one day at a time, is losing a child to illness due to unclean water, power lessens, lack of presentation, lack of human rights and lack of freedom. Indicators of the multi-dimensions can be designed for each case studied whether it is for group, community or state and these defined by the United Nations Development Group 2003.

Indicators may vary from one case to the other and even varies from developing states denoted by HPI2 and for selected OECD countries and denoted HPI-2 as defined by the UNDP human Development Report. Indicators can vary with indexes within a dimension and all make the overall index of the dimension which is used to find the overall HPI. Indicators may be weak or strong based on the case studies but all will their combination will make the dimension index. In this paper, the strength and weakness of the multi-dimension indicators as a unit will be reported.

The following table is a summary of variable dimensions with varies indicators for each dimension which is used in calculating the HPI-2 for developing countries, the case of Indonesia, Alkire (2007).

Poverty consists in any form of inequity, which is social exclusion, in the distribution of the living conditions essential to human dignity. These living conditions correspond to the capabilities of individuals, households, groups, communities and even states to meet their basic needs in the following multi-dimensional and order of importance (Asselin 2009):

Income (1), Education (2), Health (3), Food / nutrition (4), Safe water / Sanitation (5), Labor / employment (6), Housing (7), Access to productive assets (8), Access to markets (9) and community, participation / Social peace (10). Each of these dimension as indicators with weights and used to measure the overall poverty and HPI.

In a seminal paper, Sen (1976) highlighted two steps in poverty measurement: Identification and aggregation.

At the identification step one needs to determine who are the poor, and the population is divided into two groups: Poor and non-poor.

For aggregation (which means putting together) one needs to select a poverty index. Aggregation summaries overall poverty into one meaningful number.

Strengths of the Multi-dimensional Indicators of poverty:

The multi-dimensional indicators of poverty can be advantaged to states and organization such as the UNDP in order to determine and assess the characteristics of poverty and implement the suitable programs to reduce and eliminate poverty. The strength of these indicators can be stated as follow:

Flexibility, Choice and Identifications: The selection of the multi-dimensions indicator of poverty posses characteristics such that:

They are flexible and can be adopted to different contexts with different unit of analysis such as household, individual, groups, communities and states, whether for developed or developing countries.

Indicator and the aggregation of indicators within dimensions are flexible and can chosen for case.

The measure can be constructed with binary, categorical, qualitative or cordinal data

The weight for indicator can be varied based on the particular case and

The poverty cutoffs for each indicator can be varied.

Robustness tests can be applied to test how sensitive the results are to small changes

The identification of who is poor is transparent and can be communicated easily and as the number of dimensions goes up, measurement will be focused more acutely on the poorest of the poor.

Effectiveness: Multi-dimensional indicators of poverty measurements have immediate practical applications and can be used to:

Replace, supplement or combine with the official measure of income poverty.

Monitor the level ad composition of poverty and the reduction of poverty over time.

Evaluate the impact programs implemented.

Target the poorest more effectively.

Identify poverty traps and chronic poverty by applying specific patterns of deprivation, or specific kinds of vulnerability which may be used to identify early adopters or multiple deprivations for many periods.

Compare the composition of poverty in different districts, groups, communities, regions individuals or states.

Influential work of Social Scientists: The influential work of some scholar such as Sen (1992) and other have highlighted that the well-being of an individual, and hence inequality and poverty is dependent on many dimensions of human life, such as housing, education, life expectancy and income is just one of these dimensions. Thus in this framework of multi-dimensional, poverty is better defined as a situation that reflects failure in a multi-dimensional indicators of poverty and well beings.

Models: Multi-dimensional indicators of poverty can be modeled to address a wide array of different factors, typically considering not only the resources or capacities needed by individuals or families to escape poverty, but also the systemic changes that need to take place in order to enable aggregate poverty reduction at the level of a community or a society in a state.

Identifications: By identifying the poverty structure the multi-dimensional approach can be extremely useful in order to implement socio-economic actions to reduce poverty diffusion: on the basis of the previous results, these actions should be addressed to reform educational system and labor market to improve housing conditions.

Multi-dimensional indicators are recognized as better methods to measure and identify the poor. The identification procedure concerns both the deprivation in each dimension and the poverty definition across all dimensions. The multi-dimensional measures satisfy several useful properties which allow, for instance, targeting and poverty comparisons over time and across countries and regions. Other dimensions may include education, health, gender, corruption, human rights and well beings.

Prioritizing: Prioritizes work at both the systems level and the level of individuals / families and the multi-dimensional measures are fairly objective and lump all resources together for a better choice weights of the different indicator used.

Working Levels: Multi-dimensional indicators makes possible to work at three levels, family, agency and community and it will be possible for the organization / state to address most, if not all, of the dimensions indicators and level of importance and thus implementing programs where it can achieve the highest success. Implemented policies will allow the engagement of partners at multiple levels, such as the service providers and system players.

Comparison: The Multi-dimensional indicators will provide a reasonably starting point to compare each individual’s achievement against the respective dimensions specific cut offs and follow that general strategy. By also considering additional criterias that look across dimensions as well to arrive at a complete specification of identification method.

Calculation: Using multidimensional indicators can be used to calculate well being for different groups in the population, such as people from a certain region, ethnic groups or gender and it can adjust for the size of the group it is being calculating for allowing for meaning international comparisons across different states. The poverty level increases if one or more people became deprived in additional dimensions, thus it is sensitive to the multiplicity of deprivations.

Simplification: Multi dimensions measurement can be broken down into dimensions to reveal to policymakers what dimensions contribute the most multi-dimensional poverty in any given region or population group. It recognizes the practicality of new indicators where it makes it possible to adopt a multi-dimensions framework to monitor, analyze and evaluate poverty reduction and it may be used to qualify and target the poorest recipients people for social protection programs.

Robustness: Supplement national income poverty measures with a multi-dimensional poverty measure and count people by including data on the number of people who are deprived in each indicator used as well as the proportions of the country population. The robustness of key measured assumptions such as the weighted applied to indicators, to ensure that high profile comparisons are robust to monitor changes in measured assumptions.

Weaknesses of Multi-dimensional indicators of poverty: The overall multi-dimensional indicators of poverty is advantages to states and organization in order to reduce and eliminate poverty, though it has some weaknesses and can be summarized as follow:

Difficult or impossible to address all elements, since poverty is a complex issue and it depends on lots of factors and not just income. Multi-dimensional indicators of poverty of some cases vary from each other and each must be studied separate and all indicators to be identified, though the final index can be compared with other indexes. Multi-dimensional indicators can have no limit and risks.

Data gathering for Multi-dimensional indicators can be extremely challenging, very hard which lead to more and additional work for the agency to deal with in order to achieve a reasonable results.

The large number of Multi-dimensional indicators can provide lots of information, so communication can and should be tailored well to different target audiences and concerned parties in order to utilize the most of the measured data.

Due to the large number of dimensions and indicators, it become necessary to perform good asset mapping in order to find your most appropriate niche

Due to large number of indicators within the multi-dimension and can become overwhelming for those new to the issue to deal with and make the proper assessment and thus implementation of policies may not be effective.

The shift of emphasis toward multi-dimensional has presented many challenges for social scientists interested in measuring poverty and well being. The two stage procedure suggested by SEN consists of identifying the poor and then aggregating the information available on this segment of the population into an index of poverty for the entire society has to be extended.

Weakness of the multi-dimensional indicators of poverty is which and how many dimensional are relevant and should be considered or privileged. This is also called by Sen the problem of the appropriate informational basis, which information is included or excluded in the evaluation and measurement of the indicators.

The shift from a single dimension to multi-dimensional be enlarging and enriching the scope of the analysis, represents an important theoretical progress and had some relevant advantages in terms of policy. The multi-dimensional makes the measurement and evaluation of development and poverty more difficult. In fact, while measuring and assessing a given single dimension can be done with a single indicator, multiple dimensions require a set of various indicators. The multi-dimensional analysis may create problems since we need to make comparisons over time and space.

Conclusion:

Poverty has existed always and will remain in the future and its one of the most important and critical troubled issue in today’s complex world. Poverty was always identified and measured by the income however in 1996 the UNDP introduced the multi-dimensions indicators in order to measure and assess poverty in detail and implement appropriate policies to reduce and eliminate poverty worldwide and in particular the developing countries. In fact poverty is one of the main goals of the MDG set by the UNDP. Poverty is influenced by varies indicators and not just income and hence it becomes imperative to include the different varies indicators which effects poverty to enable measuring poverty more accurately, device and implement the proper policies and procedures. Multi-dimensional indicators of poverty measurement is on the rise and is increasingly used and demanded worldwide by more agencies and states and will become the future main Index in fighting poverty and will encounter additional research and studies of the multi-dimensional indicators of poverty topic.

End of paper