The Geographer 39 Vol. 65. No.

1, January, 2018

Designing Multidimensional Poverty Index for Slums: Concept

Methodology and Interpretation
Darshan Kumar Jha* and V. K. Tripathi**
Abstract
Urban poverty is a multidimensional phenomenon and one indicator, such as income, is not
capable to measure multiple aspects that contribute to poverty. Unlike monatary approach to
measure poverty, various scholars have been developed various types of index based on human
development approach. However, slums and poverty are related and mutually reinforcing, but the
relationship is not always straightforward. Slum dwellers are not a homogenous population. This
paper is an attempt to design and develop a multidimensional poverty index for slums based on
lines of versatile methodology of global MPI which might be appropriate in local contexts.

Key word: MPI, Urban Poverty, Slum and Deprivation.

Introduction million people lives in urban slums across

Urban poverty is a multidimensional country and experiences various kind of
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phenomenon, and the poor suffer from various deprivation. From the very beginning slums
deprivations e.g. lack of access to employment, and urban poverty have been considered as
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adequate housing and services, social synonyms(Bhasin, 2001). Lewis (1963)

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protection and lack of access to health, proposed his theory " culture of poverty"
education and personal security (Bhasin, regarding concept of slum and poverty. In
2001). Poverty has traditionally been India, during 1970s and even in early 1980s ,
considered unidimensional and usually urban poor used to be equated with slum
measured in terms of income or consumption. dwellers (Dandekar and Rath, 1971;
But one indicator, such as income, is uniquely Majumdar, 1978). However, slums and poverty
not able to capture the multiple aspects that are related and mutually reinforcing, but the
contribute to poverty. Various international relationship is not always straightforward.
organisations, agencies, economists, Slum dwellers are not a homogenous
sociologist and geographers took the pain to population. Some slum dwellers have incomes
identify parameters and indicators of poverty that exceed the earnings of formal sector
and development of indexes(Jha and employees, yet they choose to live in slum
Tripathi,2014). Unlike monatary approach to conditions. It is also worth noting that in many
measure poverty, various scholars have been cities, there are often more poor people outside
developed various types of quality of life index the slum areas than within them. (UN Habitat,
based on human development 2003). This paper is an attempt to design and
approach(UNDP, 1997;Sirgy et al. 2006; develop a multidimensional poverty index for
Hagerty et al. 2001; Narayana, 2009). Since slums based on lines of versatile methodology
1997, Human Development Reports (HDRs) of global MPI which might be appropriate in
have measured poverty unlike to traditional local contexts (Alkire,2008; Alkire and
income-based measures and included Foster,2011). This paper briefly discusses
indicators of health, education and standard of concept of MPI and develop a MPI for slums
living. The Human Poverty Index (HPI) was particularly for slums of Indian cities and
the first such measure, which was replaced by determine MPI for a sample slum of Varanasi
the Multidimensional Poverty Index (MPI) in city to elaborate the methodology.
2010. According to census of India 2011, 65
*Research Scholar, Dept. of Geography, Banaras Hindu University,Varanasi-221005
**Professor, Dept. of Geography, Banaras Hindu University,Varanasi-221005,
e-mail id: darshanjha@gmail.com | e-mail id: vktbhu2004@gmail.com
 The Geographer
Concept of MPI
The Multidimensional Poverty Index (MPI) is
an index designed and developed to measure
acute poverty. The MPI combines the incidence
of poverty and the intensity of deprivation to
measure acute poverty. The incidence of
poverty refers to the proportion of people who
experience multiple deprivations, whereas the
intensity of the deprivation refers to the average
proportion of (weighted) deprivations they
experience. There are two pieces of
information, and both are very relevant for
poverty measurement. The incidence of
poverty just inform about the number of people
living under improvised conditions, but the
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intensity of deprivation inform about how
much poor people are deprived on average in
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terms of indicators. If two countries/ regions
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have an equal percent of poor population, but
their intensities are different by combining the
intensity of deprivations and the proportion of
poor people - it can be concluded that these two
countries/ regions are not equally poor. In other
words, it can be said that the MPI reflects the
proportion of weighted deprivations that the
poor experience in a society out of all the total
potential deprivations that the society could
experience. If everyone were deprived in all the
considered indicators in a society, the MPI
would be 100 per cent (Santos and Alkire,
2011; Alkire and Santos, 2015). In this
approach, each person is identified as
deprived(poor) or not deprived using any
available information for household. For
example, if any child of a household is not
going to school, each person in that household
is considered deprived. This approach does not
reveal intra-household disparities, but it is
insightful and assumes shared positive (or
negative) effects of achieving (or not
achieving) certain outcomes. Vijaya, Lahoti
and Swaminathan (2014) propose MPI at an
individual level, however, in this study,
methodology of Alkire and Foster (2011) has
been used which determine MPI at household
level. MPI allows for comparisons across
regions, as well as within-region comparisons
40 Vol. 65. No. 1, January, 2018
between sub-regions, ethnic groups, rural and
urban areas, and other key household and
community characteristics because of its robust
functional form and direct measures of acute
deprivation. Additionally, it enables analysis of
patterns of poverty: how much each indicator
and each dimension contributes to overall
poverty (Alkire and Santos, 2015).
Database and Methodology
In this Study, the Multidimensional Poverty
Index (MPI) for slum dwellers is based on lines
of versatile methodology of global MPI which
can be readily adjusted to incorporate
alternative indicators, cut-offs and weights that
might be appropriate in local contexts (Alkire,
2008; Alkire and Foster, 2011). It is notable that
the MPI measures both the incidence of
deprivation (the proportion of people who
experience multiple deprivations) and the
intensity of their deprivation, the average
proportion of (weighted) deprivations they
experience. To measure acute deprivation of
slum dwellers (multiple deprivations) 17
indicators belonging to three dimensions:
education, health and living standard has been
chosen (Table 1). Among 17 indicators three
belongs to Education, four belongs to health
and rest 10 indicators belong to standard of
living. Each person is assessed based on
household achievements to determine if he/she
is below the deprivation cut-off in each
indicator. People below the cut-off are
considered deprived in that indicator. The
deprivation of each person is weighted by the
indicator's weight. If the sum of the weighted
deprivations is 33 per cent or more of possible
deprivations, the person is considered to be
multidimensionally poor. Further, above
mentioned three dimensions are equally
weighted and each of them receives 1/3 weight.
Again the indicators within each dimension are
also equally weighted. Thus each indicator
within education, health and living standard
dimension receives 1/9,1/12 and 1/30 weight
respectively. Each household is assigned a
Composite Score of Poverty (C) according to
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The Geographer
41
Vol. 65. No. 1, January, 2018
 The Geographer
the pilot survey and critical reviews of the MPI
at local level, a certain number of modifications
of the MPI were made. They are justified on the
grounds of being more in line with the SDGs
and as such they would better define
deprivation in slums of India. Table 1 provides
a summary of the dimensions, indicators,
thresholds and weights used in the MPI. The
dimensions and Indicators are further
explained below with suitable justifications.
Education: In this study, the MPI combines
three indicators that complement each other
within the education dimension. Education
level is consider very important correlate or
predictor of poverty in all across the world
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(Coulombe and Mckay, 1996; Grootaert, 1997;
Gang, Sen and Yun ,2002; Fissuh and Harris,
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2004). First indicator E1 inform that whether
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children are attending school or not, While E2
looks at completed years of schooling of
household members and E3 inform us about
educational status of female member of the
household. E2 acts as a proxy for the level of
knowledge of household members while E3
incorporate female education in the dimension.
E1 and E2 are taken from global MPI while E3
is added to make MPI indicator more inclusive.
It is notable that because of the nature of the
global MPI indicators, someone living in a
household where there is at least one member
with five years of schooling is considered non-
deprived, even though female members may
not be educated. In slums female are more
deprived in terms of education and health
dimension, so it is very important and
necessary to include female literacy in MPI
indicators. The household scores 0 in education
dimension of MPI if all children of school age
are attending school, at least one person in the
household has attended middle school or
completed five years of schooling and at least
one female member is literate.
42 Vol. 65. No. 1, January, 2018
Health
To select comparable and good indicators for
health dimension is very difficult. Comparable
health indicators for all household members are
generally missing from household surveys,
making this dimension the most difficult to
measure (Alkire and Foster, 2011, Alkire and
Santos,2015). Here, the MPI uses four health
indicators which can be measured easily and
related to overall condition of the household,
however these indicators depart significantly
from standard health indicators.H1 looks at
child mortality, H2 inform us about adult death
from diseases, H3 give information regarding
place of child delivery and H4 inform us about
average number of children per women. H1,
H3 and H4 are very closely related and can
consider as proxy for mother and children
health condition. Child mortality (H1) has
been used in global MPI as health indicator and
justification are given in Human development
reports(UNDP, 2014).While other indicators
(H2,H3 and H4) were added to make MPI
more relevant at local level. This is also notable
that data collection of nutrition of households
are more difficult at local level. Therefore this
indicator of global MPI has been eliminated. In
this MPI, each household member is
considered to be deprived if there has been at
least one child has died in the family in last five
years. Similarly, If any adult family member
has died from diseases in last five years(H2) or
if usual place of child delivery is home without
any formal medical assistance(H3) or if per
women have more than four children(H4), each
person of the household is considered to be
deprived respectively in that indicator.
 The Geographer
Table 1: MPI Dimensions, Indicators and their Weights
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Standard of Living: The global MPI considers
six indicators for standards of living while in
this study ten indicators have been considered
to determine standard of living. It includes five
Millennium Development Goals (MDG) and
Sustainable Development Goals (SDG)
indicators that are related living standards:
access to electricity(L1), the use of clean
cooking fuel(L2), access to clean drinking
water(L3) and access to improved
sanitation(L7 and L8). The justification for
these indicators is adequately presented in the
MDG and SDG literature(UN, 2009;
UNDP,2014; UN,2015; UN Habitat, 2016). It
also includes five other indicators related to
household condition and assets(L4, L5, L6, L9
and L10). These indicators are backed by
national level policy for Urban poor adopted by
government of India. These indicators become
more relevant to identify poor in slums because
of their inclusion and exclusion features.
43 Vol. 65. No. 1, January, 2018
Obviously, all the indicators used to determine
living standard are means rather than ends; they
are not direct measures of functionings. Here,
functionings are referred as "the various things
a person may value doing or being" (Sen,
1999). To understand "functioning" Alkire and
Deneulin( 2009) define and explain in this term
in simple words. "Functionings are valuable
activities and states that make up people's well-
being; such as being healthy and well-
nourished, being safe, being educated, having a
good job, and being able to visit loved ones.
They are also related to goods and income but
describe what a person is able to do or be with
these. For example, when people's basic need
for food (a commodity) is met, they enjoy the
functioning of being well-nourished" (Alkire
and Deneulin, 2009). These indicators have
two quality. First, these are means very closely
connected to the end (or the functionings) they
are supposed to facilitate. Second, these
 The Geographer
indicators are related to the MDGs, SDGs and
Government of India goals and targets, which
provide a stronger reason for their inclusion in
this index.
Computing MPI for a Slum
On the basis of above methodology MPI for the
Beniabag slum located in Varanasi city have
been computed. The Beniabag slum is adjacent
to Beniabag park. The slum is dominated by
Dom caste which is enlisted as a scheduled
caste. The majority of residents were sweepers
and engaged in private and government
agencies as sweepers. Total 32 households have
been randomly selected and surveyed through
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an interview schedule in March 2017.
For computation of MPI, first composite score
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of poverty has been computed using seventeen
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indicators belongs to three dimension i.e.
Education, Health and Standard of Living.
Than censored composite score followed by
Table 2: Household Scores to Compute MPI for Beniabag Slum
44 Vol. 65. No. 1, January, 2018
Headcount ratio referred as incidence of
poverty (H) and Intensity of poverty (A) has
been computed using above mentioned
formula in methodology section. The product
of H and A has been taken as MPI score. Table 2
shows the deprivation score of each surveyed
household and censored deprivation score. It is
observed that six households scores less than
deprivation cutoff. Therefore, the scores of
these six households have been replaced by 0.
Total member of the households (n) and total
member of the households above censored C
(q) have been also presented in the table. Ci(k)
has been also computed by multiplying
censored C and total member of the households
above censored C (q). Further
multidimensional headcount ratio (H) and
intensity of poverty (A) have been computed
using formulas. The MPI is the just product of
H and A.
 The Geographer
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Source: Computed by Authors on the Basis of Personal Field Survey, 2017
The first component of MPI i.e.
multidimensional headcount ratio (H) refers
share of multidimensionally deprived
population and can be computed as:
=159/183= 0.868
Where q is the number of people who are
multidimensionally poor and n is the total
population. The second component i.e. the
intensity of poverty (A) refers to the average
deprivation score of the multidimensionally
poor people and can be expressed as:
= 95.6/159 = 0.601
45 Vol. 65. No. 1, January, 2018
where Ci (k) is the censored deprivation score
of individual i and q is the number of people
who are multidimensionally poor.
MPI = H x A = 0.868 x 0.601 = 0.521
Interpretation
It is most important to interpret MPI and its
components, and find out various information
that MPI provides. Table 3 summaries the
different mean scores which contribute in
Composite score, Composite Score (C),
Components of MPI (H and A), and MPI itself.
It is important to note that high scores represent
high deprivation and poverty. Comparisons of
different scores reveal low quality of life in
terms of education and living standard. The
reason behind their high educational score is
that 62.5 % children of Beniyabag are not going
to school. It is also notable that 78 %
 The Geographer
households do not have at least one member
who completed 5 years of education. The third
indicator of educational dimension i.e. female
literacy also presents a bad picture. No female
Table 3: Composite Score and MPI for Beniabag Slum
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Source: Compiled by authors
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Health indicator records low deprivation in
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comparison to other dimension due to their
proxy nature. However, observing individual
health indicators show that approximately 30%
women deliver children without proper
medical assistance and child mortality is 28 %
in this slum. It is found that lack of latrine
facility (No latrine in 78% households ), poor
sewage connection, wood used as cooking fuel
(90% households use wood as fuel) and poor
housing condition(100% dwellings were
kachha or semi-pucca) are the major indicators
which determine this high deprivation score for
Beniabag slum. The Multidimensional
Headcount ratio is 0.868 which represent that
86.8 % population of this slum is
multidimensionally poor. The Intensity of
Poverty (0.601) represents that an average poor
person in this slum is deprived in 60.1%
indicators considering all indicators together.
Thus MPI give two piece of information i.e.
how many people are poor and how much an
average poor person is poor.
Decomposing MPI by Indicators
MPI identifies the combined deprivations poor
people experience and measure deprivation as
MPI Score ranging from 0 to 1. This enables
46 Vol. 65. No. 1, January, 2018
member is literate in 59 % of household in this
slum. This educational deprivation exists due
to economic and perceptual constraints and led
to poverty and create a vicious cycle of poverty.
policymakers and planners to identify
problems, target and mobilize resources and
design policies and plans more effectively. This
is especially useful when the contribution of
indicators in the MPI has been revealed. After
the computation of the MPI, one can
decompose the MPI into its component
censored indicators. For this, there is a need to
compute the censored headcount ratio in each
indicator, which is obtained by adding up the
number of poor people who are deprived in that
indicator and dividing by the total population.
Further, one can compute the contribution of
the particular indicator with the help of the
following formula.
Contribution of indicator I to MPI =
Wi * CHi
* 100
MPIo
Where wi is the weight and CHi is the censored
headcount ratio of indicator i. While MPIo
refers to overall MPI of the region.
Whenever the contribution to the poverty of a
certain indicator widely exceeds its weight, this
indicates that there is a relatively high
deprivation in this indicator in the region and
the poor are more deprived in this indicator
than in others (Alkire and Santos,2015). The
contribution of indicators in the MPI has been
computed using the formula mentioned above.
 The Geographer
Table 4: Decomposing MPI by Indicators
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Source: Computed by author
Table 4 shows the weight and contribution of
the each indicator. It can be seen that the poor in
the Beniabag Slum are highly deprived in
indicators related to education. Each indicator
(E1, E2, E3) contribute more than their
assigned weight to MPI. The combined
deprivation in education contributes 44
percent to overall poverty. Thus, it can be
suggested that policy makers should need to
focus on education in slum areas in the city to
reduce multiple deprivations. Looking at the
47 Vol. 65. No. 1, January, 2018
contribution of health indicators, it can be seen
that the combined deprivation in health
contributes only 18 per cent to overall poverty,
which is less than their assigned weight. But it
does not state that health condition of slum
dwellers is good or satisfactory. The reasons
behind lower contribution of these indicators is
that these are proxy indicators for the health
conditions and depart significantly from
standard health indicators. It is notable that
indicators of child mortality (H1) and place of
 The Geographer 48 Vol. 65. No. 1, January, 2018

delivery (H3) contribute six and five percent
respectively and the contribution is
approaching their respective weights. It can be
clearly observed that indicators of living
standard contribute very low to poverty. This
explains that the contribution provides a
picture of relative deprivation that is much
influenced by weights of the indicators. The
indicators related to this category have much
lower weight than education and health. But it
is notable that overall contribution of this
dimension is 38 per cent, and this is more than
their assigned weight. Electricity (L1) made
Zero contribution because slum dwellers use
illegal electric connection for lightening. This
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similar to their weightage. This validate the
indicators of multidimensional poverty in
slums.
Conclusion
This paper designed a multidimensional
poverty index for slums based on lines of
versatile methodology of global MPI. To
measure multiple deprivation of slum dwellers,
17 indicators belonging to three dimensions:
education, health and living standard, have
been idetified. The proposed MPI give two
piece of information i.e. how many people are
poor in the slum and how much an average poor
dweller is poor. The MPI has been decomposed

decomposition of MPI by indicators verified by indicators that verified relevance of

relevance of indicators and their weightage indicators and their weightage.
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because most of indicators contribute in MPI

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