Questions: Multidimensional Poverty Indices

Question 1

A household earns $3.50 per person per day (above the World Bank's $2.15/day income line) but lacks clean water, uses solid cooking fuel, and has no household member who has completed six years of schooling. Under the Alkire-Foster MPI with a one-third breadth cutoff, how is this household classified?

• A. Not poor — income above the poverty line is the primary criterion and overrides other deprivations
• B. Marginally poor — the method averages income and non-income deprivations to produce a composite score
• C. Multidimensionally poor — deprived in enough indicators simultaneously to meet the breadth cutoff, regardless of income
• D. Cannot be determined without knowing whether these deprivations are in the same or different dimensions

Answer: (C)

The Alkire-Foster method is explicitly designed to identify poverty that income measures miss. The dual cutoff applies two tests: first, whether the household falls below the threshold on each indicator (deprivation cutoff); second, whether the household is deprived in enough indicators simultaneously to meet the breadth cutoff (typically one-third of weighted indicators). This household's deprivations in water, cooking fuel, and education likely clear the breadth threshold. Income is not part of the MPI at all — the method measures well-being directly.

Question 2

Two countries each have income poverty rates of 25%. Country A's multidimensional poverty is concentrated in malnutrition and sanitation; Country B's is concentrated in school non-attendance and lack of electricity. What does this reveal?

• A. Nothing useful — if income poverty is the same, policy responses should be identical
• B. Country A has worse poverty because malnutrition and sanitation are more severe deprivations than education and electricity
• C. Different policy priorities: Country A needs nutritional and sanitation programs; Country B needs school construction and electrification — priorities invisible to income data alone
• D. The MPI is unreliable because two countries with the same income poverty rate produce different profiles

Answer: (C)

This is the central argument for multidimensional measurement: identical income poverty rates can mask radically different patterns of deprivation requiring different interventions. A government using only income data would prescribe the same cash transfer program in both countries. The MPI reveals that Country A needs public health and WASH (water, sanitation, hygiene) investment while Country B needs education and infrastructure investment. The decomposability of the MPI — by region, group, and dimension — is what makes it a policy tool, not just a statistic.

Question 3

Under the Alkire-Foster method, a person is classified as multidimensionally poor if they fall below the threshold on any single indicator — for example, lacking electricity alone qualifies them as poor.

• T. True
• F. False

Answer: False

This describes a union approach, not the Alkire-Foster dual cutoff. The method applies a BREADTH cutoff: a person must be deprived in enough indicators simultaneously — in the global MPI, at least one-third of the weighted indicators. Being deprived in a single indicator while meeting all others would not qualify someone as poor. This dual cutoff is what distinguishes the Alkire-Foster method from simply counting any single deprivation and is what makes it measure overlapping, simultaneous deprivations rather than isolated hardships.

Question 4

The Alkire-Foster method involves normative choices about which dimensions to include, how to weight them, and where to set cutoffs — meaning that different reasonable methodological choices can produce different poverty headcounts for the same population.

• T. True
• F. False

Answer: True

This is a genuine and acknowledged limitation of multidimensional measurement. Why weight health and education equally? Why set the poverty cutoff at one-third rather than one-quarter of indicators? These are value-laden choices, not purely empirical ones. The Alkire-Foster method is transparent about these choices (unlike many composite indices), but users must recognize that the resulting numbers embed normative judgments. This is why the method should be used with explicit documentation of all choices, sensitivity analysis across alternative specifications, and awareness that the index measures a particular operationalization of poverty — not poverty itself.

Question 5

Why might multidimensional poverty measurement lead to different policy recommendations than income-based measurement alone, even for the same population?

Model answer: Income is a means to well-being, not well-being itself. In settings with dysfunctional markets, poor public services, or gender-based exclusion, income may not translate into clean water, education, or adequate nutrition. The MPI measures the actual conditions of people's lives across multiple dimensions simultaneously. Two populations with identical income poverty rates may have completely different deprivation profiles — one concentrated in health and sanitation, another in education and housing. These different profiles imply different interventions: cash transfers improve income but may not reach people deprived of public goods. The MPI can also be decomposed to reveal which subgroups bear the heaviest burden of overlapping deprivations, enabling targeted policy that income data cannot support.

The underlying argument is Sen's capability approach: what matters is what people are able to do and be, not just their monetary resources. Multidimensional measurement operationalizes this by asking directly about capabilities (nutrition, education, shelter, sanitation) rather than inferring them from income. The policy implication is that eliminating poverty requires addressing each deprivation type, not just raising incomes.