Rethinking poverty measurement

Most people can recognise poverty when they see it. Far harder, however, is accurately measuring poverty, an important first step on the path towards trying to improve people’s lives.

To measure poverty, governments typically establish a household-income benchmark and then deem only those earning less as living in poverty.

“The problem with a poverty line is there is an incentive for policymakers, and particularly political leaders, to say that we’ve moved so many people out of poverty,” said Sharon Bessell, a professor at ANU College of Asia and the Pacific.

“You can theoretically or in practice move people from just below to just above the poverty line but haven’t really changed their lives very much,” she said. “Numbers are powerful and numbers are important, but we can forget that poverty destroys peoples’ lives.”

Along with Dr Janet Hunt of ANU, Bessell is leading an effort to make a new tool – the Individual Deprivation Measure or IDM – a new global standard for poverty assessment. Rather than only determining whether people have very low incomes, the IDM makes assessments in 15 different areas, such as: do people have adequate housing, access to adequate education and health care, or jobs in unhealthy workplaces?

The IDM also uses a 0 to 4 scale to assess deprivation rather than a poor/not poor binary decision, making it more fine-grained and useful to policymakers. This multidimensional measure then aggregates each dimension into an overall score, providing deeper insight into how different aspects of poverty interact to shape and constrain people’s lives.

Additionally, current measures of poverty usually only measure households as a single unit, which means it is not possible to accurately assess the deprivation of individual household members. The IDM assesses at the individual level, revealing how poverty plays out in relation to each of the fifteen dimensions for each adult member of the household.

Lastly, the new measure is the only mainstream measure of poverty that adequately reveals gender differences, which is essential if poverty-alleviation strategies are to reach both women and men.

“Of course gender matters. Gender roles shape people’s lives everywhere in the world – gender expectations, the norms of what women do. That’s not picked up in current poverty measurements,” Bessell said.

The IDM aggregates its assessments into one score but can also break down that information by specific deprivation, gender, age or urban/rural location.
For example, it can determine that many women in certain parts of one country lack clean water while a large proportion of both men and women in another nation face inadequate sanitation. The measure can be refined further to focus solely on elderly women or even those women living with a disability in a rural area.

The IDM has gained interest internationally and was highlighted at a side event during the United Nations Commission for Women meeting in 2015.

The Australian government has shown support for the new measure with the Department of Foreign Affairs and Trade (DFAT) awarding a $9.5 million grant to ANU and the International Women’s Development Agency (IWDA) in 2017 to develop the IDM for global use. IDM data can help countries bridge their gender gap, and contribute to measuring progress towards the meeting the UN’s Sustainable Development Goals.

“What’s been exciting for the government is that this is an Australian initiative, and one that offers a solution to a major global problem,” Bessell said.

The IDM was initially developed by an international, interdisciplinary team based at the ANU and funded by an Australian Research Council Linkage grant. The original research, undertaken from 2009 to 2013, included participatory research in six countries (Angola, Indonesia, Fiji, Malawi, Mozambique and the Philippines), resulting in a measure of deprivation that reflects the experiences and priorities of those who have experience in living in poverty.

The current IDM program, which is a partnership between ANU, IWDA and DFAT, involves further refining the survey tools and using the measure in four more countries, Bessell said. The research team is working to ensure that the IDM is both conceptually and statistically robust as it is prepared for global use.

“‘Transformation,’ ‘empowerment’ – we use those kinds of words a lot in academia but how do you actually do that? How do we measure poverty that puts us on a pathway to transform the world, transform people’s lives?”

Research funded by: Department of Foreign Affairs and Trade, Australian Research Council

Related website: IDM Program

Related research: Professor Sharon Bessell

Image credit: International Women’s Development Agency

Updated:  24 April, 2017/Responsible Officer:  Dean, ANU College of Asia & the Pacific/Page Contact:  CAP Web Team