The Human Poverty Index was an indication of the poverty of community in a country, developed by the United Nations to complement the Human Development Index and was first reported as part of the Human Deprivation Report in 1997 Multidimensional Poverty Indices use a range of indicators to calculate a summary poverty figure for a given population, in which a larger figure indicates a higher level of poverty. These topics are part of UPSC mains GS paper 3

TOPICS

  • HPI
  • MPI

HPI

HPI-1 (for developing countries)

The HPI for developing countries has three components:

  1. The first element is longevity, which is defined as the probability of not surviving to the age of 40.
  2. The second element is knowledge, which is assessed by looking at the adult literacy rate.
  3. The third element is to have a ‘decent’ standard of living. Failure to achieve this is identified by the percentage of the population not using an improved water source and the percentage of children under-weight for their age.

As a region of the world, Sub-Saharan Africa has the highest level of poverty as a proportion of total population, at over 60%. The second poorest region is Latin America, with 35% of its population living in poverty.

HPI-2 (for developed – OECD countries)

The indicators of deprivation are adjusted for advanced economies in the following ways:

  1. Longevity, which for developed countries is considered as the probability at birth of not surviving to the age of 60.
  2. Knowledge is assessed in terms of the percentage of adults lacking functional literacy skills, and;
  3. A decent standard of living is measured by the percentage of the population living below the poverty line, which is defined as those below 50% of median household disposable income, and social exclusion, which is indicated by the long-term unemployment rate.

Disadvantage of HPI:

Limited utility, because it combined average deprivation levels for each dimension and thus could not be linked to any specific group of people.

Current Status:

The HPI was replaced in 2010 by the Multidimensional Poverty Index or MPI – which directly measures the combination of deprivations that each household experiences. It complements traditional monetary-based poverty measures by capturing the acute deprivations that each person faces at the same time with respect to education, health and living standards.

Multidimensional Poverty Index (MPI)

Purpose:

To measure acute poverty: the proportion of people who experience multiple deprivations and the intensity of such deprivations.

Components:

In the version presented in the global HDR, ten indicators belonging to three dimensions: health, education and living standards.

Versions of the Multidimensional Poverty Index (MPI):

The MPI is a very versatile methodology that can be readily adjusted to incorporate alternative indicators, cutoffs and weights that might be appropriate in regional national, or subnational contexts. There are currently two broad categories of MPI
measures:

1. Multidimensional Poverty Index: This is the MPI calculated at the country level using globally comparable data. It compares the situation of countries with respect to acute poverty. In the Human Development Report (HDR) 2010, the global MPI is presented for 104 countries, together with the constituent indicators, using the method described here.

2. Regional or national MPIs: These are multidimensional poverty measures that have been created by adapting (or using forms of) the method upon which the global MPI is based to better address local realities, needs and the data available (these measures use the Alkire-Foster method). Their purpose is to assess multidimensional poverty levels in specific countries or regions in the  components most relevant and feasible locally.

For similar notes on Economy topics, refer to the linked article.