How can you tell whether or not someone is living in poverty? What makes the quality of life better for someone living on the streets of New York rather than for someone living in a dirt-floor hut in the middle of Africa? The University of Oxford recently did a study intended to answer questions just like these, utilizing determinants of poverty rarely used before. These measurements became known as the "Multidimensional Poverty Index" (MPI), and will be used by the United Nations in their next Human Development Report.

The MPI is composed of ten indicators that help determine a person's quality of life. A family is considered poor if they're deprived of over 30% of the indicators that describe a non-poverty-stricken life. Such indicators are determined by asking a new series of questions. For example, one of the questions asked was, "Does a family have a floor made from dung?" While another question posed, "Are any members of the household malnourished?"

The reason the University of Oxford researchers decided to branch out from using Gross Domestic Product as the sole indicator of poverty is due to the fact that GDP doesn't depict the entire story. For example, incomes may rise in a poverty-stricken area, but that doesn't mean nutrition in that area will become better as well. Therefore, the quality of life cannot be determined by simply evaluating the GDP.

One contemporary example of the misrepresentation of the GDP's relationship to poverty is Brazil. This South American country is considered to hold vast wealth, although it's still ranked as one of the top fifteen poorest countries in the world. Along the Brazilian Amazon, where CEN works, over 45% of the population earns less than $2 a day. The study by Oxford University, therefore illustrates that income is only part of the story; residents lack material, health and educational opportunities that dramatically effect their quality of life. As pointed out in the article, "Income clearly matters: it determines how much people can buy and therefore whether they can afford to do the things, like eat enough, that critics of income-based measures think are more important. But rising incomes do not always translate into better health, say, or better nutrition."

The MPI also helps reduce the built-in cultural bias of using pure income metrics to define poverty, which coincides with the CEN approach of letting the participants and their communities drive their own development agenda. Many of the residents in the communities where we work don't view economic development purely in terms of earning a lot of money and having a lot of consumer goods; rather, their goal is a higher quality of life, which includes access to basic services, such as education, adequate healthcare and economic opportunities, as well as freedom from disease, war and violence. The Multidimensional Poverty Index better reflects this than poverty metrics based purely on income.

To take a look at the entire article in the July 29th edition of The Economist, click here.

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