Measuring destitution in developing countries: An ordinal approach for identifying linked subset of multidimensionally poor

Overall poverty reduction may leave the poorest behind and thus it is a fair question to ask if the poverty reduction has taken place among the poorest of the poor. A typical approach is to set a more stringent poverty cutoff and assess the situation of those that are the poorest or destitute. In income poverty measurement, they are often referred as ultra poor. This paper instead pursues a multidimensional counting methodology, building on Alkire and Foster (2011), and presuming that most of the variables assessing deprivations are ordinal. A person in this framework is identified as poor if the person’s intensity of deprivation or the joint deprivation score is equal to or larger than a particular poverty cutoff. There are two ways to assess the situations of the poorest in this framework. The first – which has already been implemented – is to use a higher poverty cutoff to identify those with higher intensity of deprivation across the same indicators. The second – developed in this paper – is to apply a second vector of extreme deprivation cutoffs for key indicators, and assess who is poor by these cutoffs. We call those who are poor according to these deeper deprivation cutoffs as ‘destitute’. If the indicators, weights and poverty cutoff remain unchanged, then we can undertake certain rigorous comparisons between the destitute and the poor – identified by less extreme deprivation cutoffs. We apply these two approaches to understand the extent of destitution in 49 developing countries across the world using the same set of dimensions and indicators used for constructing the MPI (Alkire and Santos 2010), which has been reported in the Human Development Reports since 2010. We find surprisingly widespread destitution across these 49 countries housing 1.2 billion poor people – indeed around half of the MPI poor people are destitute by this measure. The paper also reports results sub-nationally for 41 countries, and illustrates how the overall change in poverty may be decomposed into changes affecting those that are destitute and those that are not using strictly harmonized variables.