Measuring rural poverty with a multidimensional approach: conceptual framework and empirical results

Ending poverty and hunger are central goals of countries worldwide. By 2030, UN member countries have committed to eradicating extreme poverty and hunger. As a partner in this objective, the Food and Agriculture Organization of the United Nations (FAO) is helping countries to develop and implement evidence-based policies, strategies and programs in the areas of its mandate – namely food, agriculture, and the sustainable management of natural resources – that promote inclusive growth and sustainable livelihoods, hence fighting rural poverty. One of FAO’s Strategic Programs is aimed at reducing rural poverty by supporting countries in designing more comprehensive and dedicated approaches targeted to the poor and extreme poor, for which identifying who the extreme poor are, where they live, and what specific constraints prevent them from escaping poverty, is necessary.

Existing evidence indicates that most of the poor worldwide live in rural areas, and that agriculture and natural resource management (NRM) are central to the livelihoods and food security of this population. Many of the rural poor are family farmers, subsistence producers, and/or agricultural workers. They include fisherfolk, pastoralists, forest-dependent people and households with no natural resource-based assets and with limited access to productive means, many of whom also experience social exclusion and physical remoteness.

While a range of poverty measures exist and are commonly used at the aggregate level, harmonized information on rural poverty is less readily available, which could inform a sound and harmonized measurement. Among the many hurdles that need to be addressed in order to improve and harmonize the measurement of rural poverty, this paper focuses on three main ones. First, the definition of rural areas is fraught with conceptual and measurement complications, as a result of the specificity of what is considered a rural space and the associated livelihoods. Definitions tend to be quite diverse across countries, and certainly more diverse compared to urban contexts. Second, the diversity of rural livelihoods and lifestyles is hardly taken into account in the measurement of poverty. In fact, common measurement frameworks are often assessed with an urban view of what constitutes the notion of “wellbeing”. Third, much of the data required for undertaking a specific measurement of rural poverty has not been available in many countries. Poverty measures need to be computed at the household or individual level, and gathered through costly surveys, again not necessarily comparable across countries and infrequent in many.

To contribute towards addressing this gap, and proposing a harmonized international measurement framework for rural areas, FAO has started a partnership with the Oxford Poverty and Human Development Initiative (OPHI), at the University of Oxford. The two institutions have undertaken a joint program of work aimed at improving the conceptualization of poverty in rural areas, while proposing, discussing and testing a multidimensional measure. A multidimensional framework provides more flexibility in dealing with some of the issues described above.

The first step in this collaboration was the development of a conceptual framework for measuring multidimensional poverty in rural areas. This entailed the proposal of a rural Multidimensional Poverty Index (R-MPI), departing from the global MPI, adding modifications to some indicators and adding some dimensions and indicators. The second step encompassed the empirical test of the proposed R-MPI, using data from four household surveys conducted in Ethiopia, Malawi, Niger and Nigeria which are harmonized within the Rural Livelihoods Information System (RuLIS) , a joint initiative of FAO, the World Bank and the International Fund for Agricultural Development (IFAD) that disseminates comparable data and indicators on income livelihoods and rural development. Results from the four countries dwell on a number of test statistics on different indicators and dimensions included in the R-MPI, showing their absolute and relative importance.

The conceptual framework and empirical tests relied on conclusions of an expert consultation held on May 13-14, 2019 at the University of Oxford, which discussed in detail the proposed R-MPI. While the empirical results were consolidated, steps were also undertaken to implement a field test of the proposed R-MPI, starting from Malawi. A set of qualitative and quantitative tests were implemented with a view to verify the relevance, solidity and appropriateness of the proposed index.

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