Part A (Q4): What are the different ways of measuring poverty?

Measuring poverty is complex and has evolved from simple income-based metrics to comprehensive multidimensional approaches.

1. The Poverty Line (Income/Consumption Method): This is the traditional and most common method. It establishes a minimum income threshold required to purchase basic necessities (primarily a minimum daily calorie intake).

• Headcount Ratio: The percentage of the population living below this officially determined poverty line. While easy to calculate, it ignores the depth of poverty.
• Poverty Gap Index: Measures how far below the poverty line the poor actually are, providing a better picture of the severity of poverty.

2. The Multidimensional Poverty Index (MPI): Developed by the UNDP and Oxford Poverty and Human Development Initiative (OPHI). It argues that poverty is not just a lack of money, but a lack of basic human capabilities. It measures deprivations across three equally weighted dimensions:

• Health: Nutrition and child mortality.
• Education: Years of schooling and school attendance.
• Standard of Living: Access to cooking fuel, sanitation, drinking water, electricity, housing, and basic assets. If a household is deprived in a third or more of these indicators, it is classified as multidimensionally poor.

3. The Human Poverty Index (HPI): An older UNDP metric that focused on the deprivation in the three essential elements of human life already reflected in the Human Development Index (HDI): longevity, knowledge, and a decent standard of living.