UN Human Development Report, Part Three: Measuring Inequality and Poverty

In my first post on the UN Human Development Report (HDR), I gave you a preview of the three new measures included in the 2010 report.  The first of these new measures is the Inequality-adjusted HDI (IHDI), which measures the losses in human development caused by inequality in health, education, and income.  The IHDI considers how human development is distributed within a country.  In other words, it measures the human development of different groups within a country rather than the average human development for the whole country.  The report describes the HDI as the potential for human development if no inequality in income, health, or education existed in a country.   When no inequality exists the IHDI will be equal to the HDI, and as inequality rises the IHDI will be lower than the HDI.   Generally, countries with low HDI have more multidimensional inequality, therefore lower IHDI scores too.  Sub-Saharan countries suffered the greatest losses in HDI due to inequality across all three dimensions.  Losses in South Asia can be attributed to inequality in health and education.  The Arab States suffer losses due in large part to education.  Other regions of the world saw smaller losses due to inequality in only one dimension. 

The second new measure introduced in the 2010 report is the Gender Inequality Index (GII), which measures the loss of achievement due to gender inequality.  In order to measure gender inequality the report looks at three dimensions – reproductive health, empowerment, and the labor market.  The reproductive health measure is broken down into maternal mortality and adolescent fertility.  The empowerment measure is composed of parliamentary representation and educational attainment from the secondary level and above.  The labor market measures female participation in the job market.  A measure of zero on the GII indicates no inequality.  A measure of one indicates complete inequality.  Inequality on one dimension of the index can increase a country’s GII score, but the highest GII scores indicate disparities across several measures.  The average GII for the ten countries closest to gender equality is .23, with the Netherlands being the most equal at .17.  The average GII for the bottom ten countries is .79, with the most unequal being Yemen at .85. 

The Multidimensional Poverty Index (MPI) is the third and final new measure introduced in the 2010 HDR.  The MPI is meant to complement income-based measures of poverty by looking at the broader poverty picture.  Specifically, it measures overlapping deprivations at the household level across the same three dimensions that are used to calculate the HDI and outputs the average number of poor people and deprivations poor households fight.  The health dimension is measured using nutrition and child mortality.  The education dimension is measured by years of schooling and children enrolled.  The living standards dimension is measured by the availability of cooking fuel, toilet, water, electricity, floor, and assets.  To calculate the final MPI, the share of people who are multidimensionally poor is multiplied by the average number of deprivations each multidimensionally poor household experiences.  A multidimensionally poor household is one the experiences deprivations in at least 2 of the 10 indicators.  When measuring poverty in this way, the numbers are greater than those measures that use income.  For example, the 2010 HDR estimates that 1.75 billion people worldwide experience multidimensional poverty, which is larger than the estimated 1.44 billion people living on less than $1.25 per day in the same countries, but it is lower than the estimated 2.6 billion people living on less than $2.00 per day.

To read previous posts on the HDR, click here or here.