Advantages And Disadvantages Of Poverty Index

The Multidimensional Poverty Index tell a lot more than what the income poverty index tells us, it shows us the nature of poverty people are facing, as it looks at the poverty of each person in three different dimensions which includes Education, Health and the Standard of living and these dimensions includes 10 indicators which gives more clearer picture of what type of poverty people are facing. The index also provides the information about the intensity of poverty in different regions, countries, states and the ethnic groups. The Multidimensional Poverty Index can help spread the funds for the developing countries based on what are the real needs for that region, country or any state, for example if out of three dimensions and ten indicators, …show more content…
Before the Multidimensional Poverty Index these aspects have always been measured in isolation whereas Multidimensional Poverty Index integrates them into a single measure which can be further broken down by the geographic area and population group and also how these deprivations interconnect. Multidimensional Poverty Index compared to the prevailing indices gives much better information as the prevailing indices more often tries to attach the number to a concept which might be important but unobserved concept for which the usual theories and measurement practices offer very slight direction. The Multidimensional Poverty Index is also helpful in pointing out the variation within different part of a one country, and also between the different groups. The Multidimensional Poverty Index helps in the analysis of patterns of deprivation reveals various types of poverty which helps the policy makers to identify the traps of poverty and strengthen the policies to reduce the poverty in those specific …show more content…
The first issue that can be pointed out in the MPI is the lack of data availability to prepare the index, and the data is collected the way it’s been collected for the old indices which puts a doubt over the credibility of the index and what are the main concepts behind the index that the same data shows different results, so the need for more data is necessary to make the index robust and that the policy makers can trust and go according to the index in eradicating the poverty or at least making an effort to do that. On the household level the measures that can be used can exceed up to 1000, which shows that as MPI only recognizes the six factors for the living standards and leaves out many of the dimensions of poverty which are included on a standard consumption based measure. In the MPI index the uncertainty about the components and their weights are not taken into account by the producers, and the users of the index are not given any guidance about the strength of the position of the resultant