Being Poor in 4D: What is Multidimensional Poverty?
Poverty has multiple dimensions. And money is just one of them. To solve poverty, we must first broaden our understanding of it. Here’s where the concept of multidimensional poverty steps in.
What defines poverty for a person? Many directly associate it with income. That is, if a person increases the amount of money they make, then they are no longer in poverty. But is that all it takes? For example, consider a nomadic camel herder living in Afar. His camels could well be estimated at hundreds of thousands of birr at least. But this person may not have access to infrastructure like clean water and electricity, or he may not have decent schools to send his children to. So, is this person considered no longer poor?
What is Multidimensional Poverty?
Multidimensional poverty is a concept that goes beyond the traditional measure of poverty based solely on income. It recognizes that poverty affects multiple aspects of a person’s life, including education, health, living standards, access to basic services, and social inclusion.
Rather than focusing only on financial resources, multidimensional poverty considers deprivations in areas such as nutrition, clean water, sanitation, housing quality, electricity, and opportunities for learning and employment. This approach provides a more comprehensive understanding of poverty, that individuals may be poor even if they have sufficient income but lack access to essential services or face significant social disadvantages.
The Multidimensional Poverty Index
There is now a broad consensus in developmental economics that poverty is multidimensional. To this end, economists have devised a metric to measure multidimensional poverty, namely the Multidimensional Poverty Index (MPI). It is an annual international measure of acute poverty developed by the Oxford Poverty & Human Development Initiative (OPHI) and the United Nations Development Program (UNDP).
The Multidimensional Poverty Index (MPI) measures poverty by assessing deprivations across three key dimensions: health, education, and living standards, each with specific indicators like nutrition, schooling, sanitation, and asset ownership. Households are considered deprived in an indicator if they fall below a defined threshold, and each indicator is weighted to contribute to an overall MPI score ranging from 0 (no deprivation) to 1 (deprived in all indicators). Households with scores above a cutoff, commonly 0.33, are classified as multidimensionally poor, and the score also reflects the intensity of poverty, showing how many deprivations a household experiences.
Ethiopia’s multidimensional poverty score in 2024 was 0.367, with an estimated 68.7% of its population living in multidimensional poverty, with an additional 18.4% of the population being vulnerable to multidimensional poverty.
This shows that overcoming poverty isn’t just about making money. It requires the establishment and construction of essential infrastructure and services. Even if people manage to have higher incomes, they need to live in a country that allows them to live a dignified life. The solution to poverty should look like poverty itself: multidimensional.