Indicators of Poverty

INDICATORS OF POVERTY ARE quantitative measures used to determine whether individuals and households suffer from poverty at various levels of intensity. The nature of these measures depends on such factors as ability to measure them, ideological understanding of poverty, and changing definitions of poverty itself. The debate about the nature of suitable indicators and the development of capacity to measure them are important aspects to consider.

In recent years, the Millennium Development Goals (MDGs) have been adopted as a global measure of poverty reduction and, hence, represent a coherent set of poverty indicators that may be used to indicate progress toward agreed targets. However, these represent only a subset of all useful poverty indicators. The MDGs are: to eradicate extreme hunger and poverty; to achieve universal primary education; to promote gender equality and empower women; to reduce child mortality; to improve maternal health; to combat HIV/AIDS, malaria, and other diseases; to ensure environmental sustainability; and to develop a global partnership for development. Most of these goals are in fact constructs—that is, they cannot be measured directly but must be considered as combinations of specific [Page 540]variables that may or may not be possible to measure. Hence the goals rest upon indicators such as access to different types of drugs and medicines, access to hospital treatment and other health services, prevalence of different types of population, and so forth. These may be both objective and subjective in nature, although strictly qualitative data may be difficult to capture with a standardized research instrument and problematic in terms of statistical analysis.

Since new forms of technology enter society and different expectations affect people's understanding of the future, the nature of the portfolio of indicators required to measure poverty needs to be assessed and reassessed as time passes and minor adjustments are required. Different rates of inflation internationally lead to requirements to update income levels and other financial information.

This leads to occasional debate as to the appropriate levels of change to make. Some household income levels are based on “baskets,” or combinations of commonly sought consumer goods. As demand for different products changes over time, the composition of the basket should also be amended to reflect those changes. Uncertainty over the nature and extent of changes in cost for important inputs such as oil and heating also makes this process more difficult, especially as there must be some consideration of future levels of cost and revenue.