World Bank to launch new way of measuring poverty using OPHI's ‘multidimensional’ approach

19 October, 2016

The World Bank has announced it will broaden the way in which it measures poverty by introducing a new ‘multidimensional’ measure that captures non-monetary aspects of poverty, using a methodology developed by Sabina Alkire and James Foster of the Oxford Poverty and Human Development Initiative (OPHI) at ODID.

The introduction of the new metric, to be used in conjunction with the Bank’s $1.90 measure of extreme poverty, was one of the recommendations made by a commission led by Oxford economist Sir Tony Atkinson and contained in the Monitoring Global Poverty report, released by the World Bank on 18 October.

OPHI has pioneered an approach to poverty measurement that goes beyond income by incorporating non-monetary deprivations, for example poor sanitation, malnutrition or lack of education. Individuals are defined as ‘multidimensionally’ poor if they experience a given number of such deprivations at the same time.

OPHI’s Global Multidimensional Poverty Index (MPI) has been used to measure poverty in the UN’s Human Development Reports since 2010, and many developing countries have introduced national measures drawing on the same approach.

Part 2 of the Monitoring Global Poverty report, which explores a series of complementary indicators of poverty, recommends that the Bank introduce a ‘multi-dimensioned poverty indicator based on the counting approach, and covering the overlap of dimensions’.

In response, the Bank said it would implement that recommendation by tracking non-monetary deprivations in three specific domains: educational outcomes; access to health care; and access to basic services, such as water, sanitation and electricity. It said the dimensions would be aggregated ‘using a member of the class of multidimensional poverty indices’ proposed by Alkire and Foster.

The Commission on Global Poverty was convened in June 2015 by then-World Bank Chief Economist Kaushik Basu to advise the Bank on how to improve its practices and procedures for the measurement and monitoring of global poverty. The commission brought together 24 leading economists with expertise in poverty, including Professors Alkire and Foster.

Read the report

Read the Bank’s response

Find out more about OPHI’s Multidimensional Poverty Index