Jonathan HaughtonSuffolk University, Boston MA 02108, USA
[email protected] http://web.cas.suffolk.edu/faculty/jhaughton/
Knowledge Globalization Conference, Shijiazhuang, May 30-31, 2014
Setting the Post-2015 Development Agenda:
Is Multidimensional Poverty Measurable?
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
MDGs are ending; what will follow?How measure poverty and hunger?
Conventional monetary metric? Issues in making international comparisons
Multidimensional poverty MPI 2.0 headline?
Other methodsDoes it matter?
CorrelationsThe data problemRecommendations
Outline
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
MDGs are ending; what will follow?How measure poverty and hunger?
Conventional monetary metric? Issues in making international comparisons
Multidimensional poverty MPI 2.0 headline?
Other methodsDoes it matter?
CorrelationsThe data problemRecommendations
Outline
Millennium Development Goals
Emerged: 23 conferences. Agreed Sept. 2000 by 147 countries8 goals, 21 targets, 60 indicators, over 1990-2015Concentrate world attention on developmentChina: reports; fast poverty reduction
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
1: Eradicate Extreme Poverty and Hunger
Target 1.A: Halve, between 1990 and 2015, the proportion of people whose income is less than USD1.25 a day Met by 2010: 700m fewer extremely poor; 43% to 21% But still 1.2bn poor, including c. 90 m in China
Target 1.C: Halve, between 1990 and 2015, the proportion of people who suffer from hunger Reachable by 2015: 19% in 1990-92 to 13% in 2010-12 FAO: 870 million people undernourished. Including 100m children under 5
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
>850 surveys, 127 LDCs; PovcalNet (WB)
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
Gallup poll version
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
Poverty in China: Gallup results
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
Sustainable development goals (SDGs): Why? Clarify what developed countries can do (Mohieldin
2013) Global commons/public goods
Financial architecture / trade / peace & security / environment / communicable diseases / knowledge / statistical capacity
ODA: more, more effective Clarify what LDCs can do
Institutional quality Targeting Financial sector deepening / inclusion Tax effort and equity
U.N. Open Working Group on SDGs
Consensus: SDGs yes, …
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
OWG“Eradication of poverty in all its forms remains the overriding priority and a necessary condition for sustainable development.”
Pogge & Rippin“… broad agreement that the fight against poverty ought to take centre stage in any new development agenda.”
World Bank“Working for a world free of poverty”Propose: Reduce headcount poverty rate to 3% by 2030
Remember: One reason is to target interventions
… and poverty still central
Targeting Example: Social Protection in Indonesia
Context:12% poor (29 million out of 240 million)
Post Asian Financial Crisis (1997) strategy:Food; jobs; access to health, education; credit for small enterprises. [Basri & Papanek]
Political support for targeting poverty
National Team for the Acceleration of Poverty Reduction (TNP2K), VP. Think tank
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
High leakage currently:
Modest programsTargeting not great
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
Raskin: Rice for the poor. Also conditional cash transfers; and PNPM (cash for work)
Indonesia: New Effort to Identify the Poor
Poverty mapping: identify poor areasConstruct proxy means testing methods
By district (n=500); based on detailed survey dataIndex = f(housing info, assets, hhsize, education, work status, …)
Collect data on proxiese.g. 43% of households, 2011; + census data; + local community data.
Identify poor, unify database, issue cards.Allow system for appeals; revisions; updates
Are SDGs needed to promote such initiatives?
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
Goal: 3% by 2030?
Chandy, Ledlie, Panciakoa, 2013
2030: 2/3 poor in fragile states
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
“Growth is good for the poor” (Dollar & Kraay 2002)
Refers to monetary poverty
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
Inequality is bad for the poor (Ravallion)
Getting to 3% will be hard
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
MDGs are ending; what will follow?How measure poverty and hunger?
Conventional monetary metric? Issues in making international comparisons
Multidimensional poverty MPI 2.0 headline?
Other methodsDoes it matter?
CorrelationsThe data problemRecommendations
Outline
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
Basics: What is poverty?
“pronounced deprivation in well-being”Monetary approach
Emphasize “command over commodities”; individuals then make choices. Based on income or expenditure. Excludes non-market items (e.g. public services, liberties).
Multiple poverties Food poor; shelter poor; health poor; education poor.
More paternalistic.Capabilities
Sen: poverty is lack of capability to function in society. Can lack income, education, health, security, self-confidence, liberties. “Multidimensional”
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
Measure wellbeing using income or consumption/capita
Or per adult equivalent
Pick poverty line Often linked with caloric needs plus non-food essentials
Aggregate: Foster-Greer-Thorbecke
Conventional approach
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
Other measures
Sen-Shorrocks-Thon
Watts
Time Taken to Exit
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
Choice of measure matters only a little for ranking (#6 here)
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
International Comparisons: WB/Chen & Ravallion
1. Pick poverty lineBased on basic needs lines in poorest countriesUSD1.25/person/day in 2005 prices Appropriate?
2. Use PPP exchange rate: get poverty line in local currency for some specified year Accurate?
3. Use CPI to create poverty line in nominal local currency, annually since 1981 Poor basket?
4. Measure poverty rate from survey data; if necessary estimate using Lorenz curves
5. Interpolate poverty rates for intervening years6. Aggregate to get world poverty rate
Pogge & Reddy: Use basic needs country by country?
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
Focus on chronically poor?
Types of poverty (measured with panel data)A. Chronically poor: = average consumption < zB. Persistently poor: consumption always < z
Subset of chronically poor
C. Transient poor: consumption sometimes < z, but not on average
D. Never poor: consumption never < z
Goal: End chronic poverty?Matters for targeting (given high mobility):
A, B need income; C needs insurance.
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
Transition Matrix: quintiles
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
Types of poverty in 4 Chinese provinces
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
MDGs are ending; what will follow?How measure poverty and hunger?
Conventional monetary metric? Issues in making international comparisons
Multidimensional poverty MPI 2.0 headline?
Other methodsDoes it matter?
CorrelationsThe data problemRecommendations
Outline
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
Alkire and Santos 2012 Some needs not supplied by markets Capacity to convert income into functionings differs (e.g.
health) Poor people mention other needs
Sen 1999Poverty is “deprivation of basic capabilities rather than merely the lowness of incomes”
Nussbaum 2003Life expectancy / health & basic needs / freedom from violence / education and opportunities / emotional health & freedom from fear / mental health / social inclusion & freedom from discrimination / healthy environment & nature / leisure / political participation
Is poverty multidimensional?
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
Alkire & Sumner 2013Use a multidimensional poverty index, not P0
Headline MPI 2.0?
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
AF Multidimensional Poverty Index: Mechanics
1. Pick dimensions of deprivation e.g. schooling, health, electricity
2. Set cutoffs (“poverty lines”) for eache.g. Less than 5 years of schooling
3. Select weights for each dimension4. Count (weighted) deprivations per person5. Define the poor
e.g. at least 3 deprivations; or deprived on at least 0.5 of weighted dimensions
6. Measure poverty: MPI = H × AH is % who are poor (“headcount”); A is average proportion of deprivations per poor person.
Duclos et al. (2001)“No single such index [MPI aggregation] has been devised that has received unanimous approval”
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
Example (Alkire and Foster method)
Note: In this example, poverty is defined as having at least two deprivations.
Achievement matrix Deprivation matrix Censored deprivation matrixDimension Dimension # Dimension #
Individual A B C D Individual A B C D Individual A B C D1 13.1 14 4 1 1 0 0 0 0 0 1 0 0 0 0 02 15.2 7 5 0 2 0 1 0 1 2 2 0 1 0 1 23 12.5 10 1 0 3 1 1 1 1 4 3 1 1 1 1 44 20 11 3 1 4 0 1 0 0 1 4 0 0 0 0 0
Cutoff 13 12 3 1 H = 2/4 = 0.5 = 50% A = avg(2/4,4/4) = 0.75MPI = 50% * 0.75 = 0.375.
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
UNDP implementation
Mirrors HDI. Ten indicators (with weights) Education
Yrs schooling. Deprived if no one has 5 or more. (1/6) School attendance. Deprived if not at school to class 8 (1/6)
Health Child mortality. Deprived if any child died. (1/6) Nutrition. Deprived if any household member malnourished (1/6)
Standard of living. Deprived if No electricity (1/18); no improved sanitation (1/18); no access to
safe drinking water (1/18); dirt floor (1/18); cooks with wood/charcoal (1/18); has no more than one consumer durable such as radio, phone, bike, etc. (1/18)
Poor if deprived in at least 1/3 of (weighted) indicators
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
Selected MPIs
Source: UNDP, Human Development Report 2013
Population in multidimensional poverty
Contribution of deprivation to overall poverty
Population in povety
Multidimensional poverty index
Headcount Intensity Education Health Living Standards
PPP $1.25 per day
National pov line
Year Value % 000 % % % % % %
Russia 2003 (W) 0.005 1.3 1,883 38.9 84.2 2.5 13.3 0.0 11.1 Thailand 2005/2006 (M) 0.006 1.6 1,067 38.5 40.7 31.2 28.1 0.4 8.1 Sri Lanka 2003 (W) 0.021 5.3 1,027 38.7 6.3 35.4 58.3 7.0 8.9 Morocco 2007 (N) 0.048 10.6 3,287 45.3 35.5 27.5 37.0 2.5 9.0 China 2002 (W) 0.056 12.5 161,675 44.9 64.8 9.9 25.2 13.1 2.8 South Africa 2008 (N) 0.057 13.4 6,609 42.3 7.5 50.5 42.0 13.8 23.0 Iraq 2006 (M) 0.059 14.2 3,996 41.3 47.5 32.1 20.4 2.8 22.9 Indonesia 2007 (D) 0.095 20.8 48,352 45.9 15.7 50.6 33.8 18.1 12.5 Ghana 2008 (D) 0.144 31.2 7,258 46.2 32.1 19.5 48.4 28.6 28.5 Cambodia 2010 (D) 0.212 45.9 6,415 46.1 22.1 32.7 45.1 22.8 30.1 Kenya 2008/2009 (D) 0.229 47.8 18,863 48.0 12.7 30.1 57.2 43.4 45.9 India 2005/2006 (D) 0.283 53.7 612,203 52.7 21.8 35.7 42.5 32.7 29.8 Senegal 2010/2011 (D) 0.439 74.4 7,642 58.9 31.8 40.6 27.6 33.5 50.8 Ethiopia 2011 (D) 0.564 87.3 72,415 64.6 25.9 27.6 46.5 39.0 38.9 Niger 2006 (D) 0.642 92.4 12,437 69.4 35.4 21.5 43.2 43.6 59.5
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
MDGs are ending; what will follow?How measure poverty and hunger?
Conventional monetary metric? Issues in making international comparisons
Multidimensional poverty MPI 2.0 headline?
Other methodsDoes it matter?
CorrelationsThe data problemRecommendations
Outline
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
MPI = 6.40 + 0.53 P0 R2 = 0.55
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Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
Case: Urban Poverty in Vietnam
% poor based on income/capita: HCMC: 2.1% Hanoi: 4.6% Residents: 3.0% Migrants: 2.6%
Multidimensional poverty: 8 dimensions Income; education; health; access to social security; housing
quality; housing services; social inclusion; physical safety At least 3 deprivations (k=3):
Headcount (H): HCMC: 28% Hanoi: 15%
Adjusted poverty headcount (MPI): HCMC: 12% Hanoi: 6%
Adjusted poverty headcount (MPI): Residents: 3% Migrants: 14%
UNDP & Statistical Offices: Urban Poverty Assessment, 2010
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
Multidimensional Poverty Index
The norm in Mexico (2009), Colombia (2011)Challenges:
Data Ideally, extensive survey data In practice: UNDP implementation uses DHS (USAID/UN),
MICS (UNICEF), WHS (WHO), and excludes income What weights? [Contrast with prices] What series, thresholds, overall poverty cutoff? Atkinson & Lugo (2010, p. 14): “A multi-dimensional
approach risks, however, diluting the message.” [Dashboard]
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
MDGs are ending; what will follow?How measure poverty and hunger?
Conventional monetary metric? Issues in making international comparisons
Multidimensional poverty MPI 2.0 headline?
Other methodsDoes it matter?
CorrelationsThe data problemRecommendations
Outline
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
Aside: Is There a Middle Ground?
Dashboard shows marginal distributions onlyMPI weights are problematicNeed to examine the joint distribution of poverty
dimensions Which country is poorer?
A, if marginals are used (or union approach) B, if joint distribution is used (and intersection approach)
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
Diagram covers 120.3 m (total pop: 498 m in 2008)
Source: Atkinson & Marlier (eds.), 2010
Is poverty rate: 6.9 m (1.4%)? 51.8 m (10.4%)? 120.3 m (24.1%)?
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
Bourguignon & Chakravarty (2003) CES aggregation of poverty gaps for different
dimensions Requires continuous data Requires weights and measures of substitutability
Unmet Poverty Gap approach Was common in Latin America; # deprived on 1, 2, 3,
… dimensions Szekely: weights vary (“Voices of poor”)
Income: 2.4 Child attends school: 1.8 Education of head of household; sanitation: 0.6 each Water; shelter: 0.6 each
Other measures
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
MDGs are ending; what will follow?How measure poverty and hunger?
Conventional monetary metric? Issues in making international comparisons
Multidimensional poverty MPI 2.0 headline?
Other methodsDoes it matter?
CorrelationsThe data problemRecommendations
Outline
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
Monitoring requires dataData availability incomplete (Mohieldin)
Data availability is not yet adequate
2005 2010
%
LDCs without enough data to measure trend in
Poverty 63 39
Malnutrition 50 36
Water 35 8
LDCs with poverty estimate < 5 years old
68 54
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
Mohieldin (2014)
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
De Weerdt et al. (2014) FAO hunger measure: Food balance sheet + survey
data on expenditure or income distribution Use household data directly
But then details matter – results are very fragile
Measuring Hunger
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
Model Recall Food items
N Kcal/cap % hungry
1 14 days 58 504 1,793 68
2 7 days 58 504 2,129 48
3 7 days 17 504 2,066 48
4 Year 58 504 1,909 59
5: hh diary 14 days 58 503 2,413 27
6: hh diary, few visits
14 days 58 503 2,520 23
7: indiv. diary 14 days 58 503 2,677 19
Tanzania food adequacy studies
7 randomly-chosen samplesDetails matter!Need for standardization
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
MDGs are ending; what will follow?How measure poverty and hunger?
Conventional monetary metric? Issues in making international comparisons
Multidimensional poverty MPI 2.0 headline?
Other methodsDoes it matter?
CorrelationsThe data problemRecommendations
Outline
Post-MDGs and poverty Knowledge Globalization Conference, Shijiazhuang, May 31, 2014
For goal 1 of SDGs, use a monetary poverty target 5% by 2030? Halve $2/day line? 3% chronic poor? Complement with other development goals
i.e. don’t use MPI; would be double use of multidimensions i.e. dashboard approach
Donor support for surveys Link with administrative data Improve price data Standardize protocols for measuring, comparing,
spending, especially on food
Recommendations
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