It’s a statistic you’ve likely heard before, in newspapers or television infomercials: 1.4 billion people live on less than US$1.25 a day.

The World Bank set this number as the global poverty line in 2008, creating an international standard for what it takes to get by. The statistic is simple and easy for people to relate to – In the United States, US$1.25 is a large candy bar, or less than a gallon of gas.

But is it a relevant way to measure poverty?

Researchers Sabina Alkire and Maria Emma Santos, from the Oxford Poverty and Human Development Initiative, think not. The one-price-fits-all model makes income the only factor in determining poverty.

Their new “Multidimensional Poverty Index,” launched with support from the United Nations Development Programme, instead looks at several different needs, and the percentage of households living without them. Amenities like water, primary school, and electricity are considered.

The index compiled research from 104 countries that represent 78% of the world’s population. A third of the population in the countries covered (around 1.7 billion people) lives in multidimensional poverty, the study found – around 400 million more people than are considered extremely poor by the World Bank’s standards.

The more complicated calculator means substantial differences in how poor we consider some countries to be, as highlighted by a recent piece in the Economist. India, for example, has many families earning more than US$1.25 a day who still cannot afford a proper toilet. Tanzanians, on the other hand, are making lower wages, but are more likely to be able to provide food and water for their families. Ninety percent of Ethiopia is considered poor by MPI’s standards, while less than 40% of the country’s population would be classified poor on income alone.

Most importantly, the MPI shows that more of the world’s poor are now concentrated in India than in Sub-Saharan Africa. Eight states in India alone are home to more poverty than the 26 countries in Southern Africa. Growing incomes for employed Indians doesn’t mean a better standard of living.

“[It] is like a high-resolution lens which reveals a vivid spectrum of challenges facing the poorest households,” said Alkire, Director of the Oxford Poverty and Human Development Initiative, in an interview with The Guardian. The index should be a wake-up call to separate the true development success stories from those that still need extended attention.

“We are featuring the Multidimensional Poverty Index in the Human Development Report this year, because we consider it a highly innovative approach to quantifying acute poverty,” said Jeni Klugman, Director of the UNDP Human Development Report Office.

The index was released ahead of the September 2010 Summit on the UN Millennium Development Goals, where it will be presented. With five years left to achieve the lofty goals of poverty eradication, the Summit will surely be a reality check on tangible progress.

A more complex way of measuring poverty can only aid future policy – directing programs and policy toward targeted issues, rather than blanket aid.  The MPI shows that the path to ending poverty in Togo cannot be the same approach used in Bangladesh.

An increase in income is an easy number to track and quantify. But without access to basic amenities, the number means nothing for the world’s poor.

image source: cnn.com

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