Jul 072014
 

How severe is poverty in Mexico? How does it compare to poverty in other countries? A new study released in June 2014 suggests that 2.8% of Mexicans live in severe poverty based on a Multidimensional Poverty Index (MPI) developed by the Oxford (University) Poverty & Human Development Initiative (OPHI) [1]. For all 108 countries in the study (representing roughly 78% of the world’s population), 32% live in severe poverty; thus the percentage for Mexico appears rather small in comparison to most places. This post is an update of previous Geo-Mexico posts on this topic:

The MPI in the study discussed here is based on a complicated methodology which relies on three different sets of household survey data. Its approach looks at poverty characteristics of household. This is superior to most other poverty measures that look at incomes in comparison to some type of poverty line, which varies widely from country to country. A household may have adequate income, but if that money is spent frivolously on alcohol, drugs, gambling, entertainment, etc., the children in the household might still be living in severe poverty.

Multi-dimensional Poverty Index

Multi-dimensional Poverty Index. (From Alkire & Santos, 2010)

The MPI uses ten indicators (see graphic) representing three equally weighted dimensions of poverty or deprivation within a household: Education, Health and Standard of Living [2]. Education looks at whether any member of the household has at least five years of schooling and if all school –aged children are attending school. Health focuses on whether a child in the family has died and if any adult or child in the household is malnourished. Standard of Living has six indicators for each household: electricity, safe drinking water, proper sanitation, adequate house flooring (not dirt, sand or dung), clean cooking fuel (not wood, charcoal or dung), and ownership of more than one of the following – radio, TV, telephone, bike, motorbike, refrigerator or ownership of a car or truck. Obviously these indicators reveal far more details about poverty than simple income measures. A complicated formula is used to combine these indicators to identify households in severe poverty. A more detailed description of the methodology is provided in this previous post.

As noted above, according to MPI, 2.8% of Mexicans or 3.3 million people are severely poor [3] compared to 32% or 1.6 billion in the 108 countries analyzed which include most of the countries of Latin American, Africa, Asia and Eastern Europe. Of the 108 countries, 29 have smaller percentages living in severe poverty than Mexico. These include Belarus (0.0%), Russia (1.3%), Ecuador (2.2%) and Brazil (2.7%). It is interesting that Ecuador and Brazil have lower MDI levels of poverty than Mexico because both have lower per capita incomes than Mexico and far more income inequality. For example, 0.7% of Mexicans live on under $1.25 a day and 4.5% live on under $2.00 a day, compared to 4.4% and 13.6% for Ecuador and 3.8% and 9.9% for Brazil. Apparently, in Ecuador and Brazil either survival necessities are cheaper or they spend their incomes more wisely or public safety nets are more effective. This suggests that Mexicans could do a better job of combating severe poverty.

Countries with slightly worse MPI levels than Mexico are Argentina (3.0%), the Czech Republic (3.1%), Hungary (4.6%), Dominican Republic (4.6%), Colombia (5.4%), Egypt (6.0%) and Turkey (6.6%). That the Czech Republic and Hungary are below Mexico is a bit of a surprise. Further down on the list are China (12.5%), South Africa (13.4%), Peru (19.9%), Indonesia (20.8%), and Guatemala (25.9%). The countries with the severest MPI levels include Pakistan (49.4%), India (53.7%), Nigeria (54.1%), the Democratic Republic of the Congo (73.2%), Ethiopia (88.6%), and lastly Niger (92.4%).

According to the study the country with the most people living in severe poverty is India (612 million) followed by China (162m), Bangladesh (83m), Nigeria (82m), Pakistan (81m), Ethiopia (66m), Indonesia (48m), the Democratic Republic of the Congo (44m). Compared to these countries, the 3.3 million in Mexico seems like a rather small number.

Though severe poverty in Mexico is far less than in most other countries, it is still a very serious problem which needs to be addressed. As might be expected, within Mexico severe poverty is worst in rural areas and southern states; we will look more closely at this in a subsequent post.

References:

[1] Oxford Poverty and Human Development Initiative (OPHI), “Global MPI Data Tables for 2014”, Oxford University, June 2014.

[2] Sabine Alkire and Maria Emma Santos, “Acute Multidimensional Poverty: A new Index for Developing Countries”, Oxford Poverty & Human Development Initiative (OPHI), July 2010, Paper No. 38, .

[3] According to the Mexican Government’s Poverty Line, 52% of Mexicans live in poverty. Obviously this is a very different poverty measure than the MPI.

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