Presentation made by government of Colombia during Indonesia’s study visit to South America Social Policies on June 2012. The study tour was organized by UNDP/IPC-IG.

1. Multidimensional Poverty Index for
Colombia and its applications
(MPI-Colombia)
HDCA Conference, The Hague, 2011
ROBERTO ANGULO
BEATRIZ YADIRA DÍAZ
RENATA PARDO
National Planning Department
Division of Social Promotion and Quality of Life
September 2011

2. Technical team:
Roberto Angulo (DNP-DDS)
Renata Pardo (DNP-DDS)
Beatriz Yadira Díaz (DNP-Essex)
Yolanda Riveros (DNP-DDS)
National Planning Department:
Technical Divisions
OPHI:
Sabina Alkire
Diego Zavaleta
José Manuel Roche
James Foster (George Washington University)
Aknowledge:
Esteban Piedrahíta
Juan Mauricio Ramírez
José Fernando Arias
Hernando José Gómez

3. “Any exercise of measurement and indexation
is basically an exercise of reflection, analysis
and judgement, and not only of observation,
registration, or chronic”.
Amartya Sen 1998

4. The MPI-Colombia:
•Is a poverty measure proposed by the
National Planning Department based on
the Alkire&Foster methodology
•Was developed as an instrument for
design and monitoring public policy
•Complements the income poverty
measure
•Was socialized with the Colombian
academy and policy makers

5. Colombia’s unit of analysis:
The household

6. The household as the
analysis unit
• Normative: The guarantee of living conditions is not given by the
responsibility of individuals in isolation - (Political Constitution of
Colombia). Co-responsibility.
• Empirical: There is evidence that in Colombia the household
responds in adverse situations, not individuals in isolation – there is
a combination of actions involving different household members
• Social Policy: Instruments, programs and strategies for reducing
poverty in Colombia are focused at the household level and not on
individuals in isolation - SISBEN, UNIDOS network strategy, Familias
en Acción (conditional cash transfer program)

7. Dimensions and Variables:
I P M

8. Choosing dimensions and variables
Criteria for selecting Criteria for validating
variables variables
1. Frequent usage (national or Accuracy of the estimated
international). Literature review, variables for each of the
discussion with experts and inclusion in
study’s domains (ecv<15%).
other indices – IPM-OPHI International,
BNI, LCI y Sisbén III. *DANE follows:
0-7: Accurate estimation
2. Variables sensitive to public policy 8-14: acceptable accuracy
15-20 : accuracy is not so good
implementation 20-25: inaccurate
3. Availability of data within the Living
Standards Measurement Surveys (LSMS)

9. Dimensions and variables
Education Childhood & Labor Health Public utilities &
youth housing conditions

10. Household education conditions
Educational achievement: A
household is deprived if the average
level of education for individuals 15
and older within the household is
below 9.
Literacy: A household is deprived if at
least one household member 15 or
older does not know how to read or
write

11. Childhood and youth
conditions
School attendance: a household is
deprived if at least one child between ages
6 and 16 within the household does not
attend school
No school lag: a household is deprived if
any of the children between ages 7 and 17
is lagging in school (approved school years
is less than the normative number of school
years)
Access to child care services: A household
is deprived if at least one child between 0
and 5 years old, does not have
simultaneous access to health, proper
nutrition, and adult supervision or
education.
Children not working: A household is
deprived if there is at least one child
between 12 and 17 in child labor conditions

12. Labor
Absence of long-term
unemployment: A household is
deprived if there is someone in
long-term unemployment (>12
months)
Formal employment: A household
is deprived if there is at least
someone holding an informal job or
someone in unemployment.

13. Salud
Health insurance: A household is
deprived if there is at least one member
(over 5 years old) without health
insurance.
Access to health services: A household is
deprived if at least one household
member faced access barriers to health
care services when needed.

14. Servicios públicos y
condiciones de la vivienda
Access to drinking water: Urban households are deprived
they have no access to public water services.
Rural households - deprived when the water used to prepare
food is obtained from a well, rainwater, a river, spring water
source, public well, water truck or water carrier
Adequate elimination of sewer waste: Urban households –
deprived if they have no access to public sewer service. Rural
households - deprived if they have a toilet without a sewer
connection, a latrine or if they simply do not have a sewage
system
Adequate flooring: Households with dirt floors are deprived
Adequate walls: Urban households - deprived when exterior
walls are built of untreated wood, boards, planks, guadua (a
type of bamboo) or other vegetable, zinc, cloth, cardboard,
waste material or when no exterior walls exist
madera burda, tabla, tablón, guadua, otro vegetal, Zinc, tela,
cartón, deshechos y sin paredes. For Rural households -
untreated wood & board are considered adequate materials
No critical overcrowding: Urban households deprived if there
are 3 or more p.p.r. Rural households – more than 3 p.p.r.

15. Dimensions on a scale: Selecting the
weighting structure and the cut-offs

16. Weighting scheme
Weighting
scheme
Nested weighting structure:
•Each dimension has the same weight (0.2)
•Each variable has the same weight within
each dimension

17. Dimensions (5) & variables (15)
0.2 0.2 0.2 0.2 0.2
Childhood & youth Public utilities &
Education Labor Health
conditions housing conditions
Educational School Absence of Health insurance Access to
achievement atendance long-term improved
unemployment drinking water
No school Access to health
Literacy Adequate
lag care services
elimination of
Formal when needed
sewer waste
0.1 employment
Access to 0.1 Adequate
child care 0.1 flooring
services
Adequate
walls
Absence of No critical
child overcrowding
employment
0.04
0.05

18. Second Cut-off point k
Second cut-off point:
identifying the poor
Criteria for selecting k:
1. Sample estimates robustness for each of the MPI
indicators (H, M0, M1 & M2). evc<15% for each of the
analysis domain
 Robust band of k values: H & M0 [k=1/15, k=6/15]
M1 & M2 [k=1/15, k=5/15]
2. Statistical significance: no overlap of confidence interval
at 95% for the estimated measures.

19. Weighting scheme and
cut-off point k
Criterion of reasonability
Median of the number of deprivations count C, 2008
Median
Population that perceives themselves as poor 5.0
Population below the income poverty line 5.1
Population that perceives themselves as poor and
5.4
is below the income poverty line
Non-poor population by perception 3.0
Population over income poverty line 3.0
Total population 3.8
Source: DNP-SPSCV calculations using SMLS 2008
A non-poor person (objectively or subjectively) faces on average 3 deprivations,
which suggests that with a low value of k we would capture people with
deprivations not necessarily related to poverty conditions.

20. Weighting scheme and
cut-off point k
Chosen cut-off k=5/15, that is 33% of
deprivations: H & M0

21. Measurement results

22. K=5/15
Poverty headcount ratio (H)
70%
60.4%
60%
49.2%
50%
40% 34.7%
30.4%
30%
20%
10%
0%
1997 2003 2008 2010
Average deprivation share (A)
K 1997 2003 2008 2010
5/15 48% 47% 45% 43%
Source: DNP, DDS, SPSCV. 2011

23. Deprivation rates
Poor vs. non-poor
Percentage of households facing deprivation in each
variable
Formal employment rate 99%
75%
Educational achievement 95%
43%
School lag 62%
27%
Healthcare coverage 47%
13%
Illiteracy 45%
3%
Elimination of sewer waste 30%
6%
Overcrowding 30%
10%
Access to improved water sources 29%
6%
Access to infant care services 22%
9%
Floors 20%
2%
Access to health care services if… 17%
4%
Longstanding unemployment 16%
8%
School attendance 16%
1%
Child labor 13%
2%
External wall materials 8%
1%
Poor Non-poor
SOURCE: DNP-DDS-SPSCV
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24. Headcount ratio (H) urban-rural
K=5/15
Poverty decreases notably, but
urban-rural differences increase
Headcount ratio (H)
H rural/H urban
100% 86% 3
77% 2.26
80% 2.21
60%
60% 51% 53% 1.69 1.93
40% 2
40% 27% 23%
20%
1
0% 1997 2003 2008 2010
1997 2003 2008 2010
Urban Rural
Source: DNP, DDS, SPSCV. 2011

25. Adjusted headcount ratio,
poverty gap and severity
results

26. Adjusted Headcount ratio (M0) K=5/15
40%
29%
23%
Gap (M1) & 16%
Severity (M2) 20% 13%
K=4/11
23% 20% 0%
20% 1997 2003 2008 2010
17% 15%
11%
10% 1997
9%
10% 8% 2003
2008
2010
0%
M1 M2
Source: DNP, DDS, SPSCV. 2011

27. Dominance analysis
I P M

28. 1. For any value of k for
every year of analysis
(1997-2010 National)

29. Headcount ratio (H) for any value
of k/15 (1997-2008)
100%
90%
80%
70%
60% 1997
50% 2003
2008
40%
2010
30%
20%
10%
0%
Source: DNP, DDS, SPSCV. 2011

30. Adjusted headcount ratio (M0) for
any value of k/15 (1997-2008)
1.00
0.90
0.80
0.70
0.60 1997
0.50 2003
2008
0.40
2010
0.30
0.20
0.10
0.00
Source: DNP, DDS, SPSCV. 2010

31. Adjusted poverty gap (M1) for any
value of k (1997-2010)
40%
35%
30%
25%
1997
20% 2003
2008
15% 2010
10%
5%
0%
1/11 2/11 3/11 4/11 5/11 6/11 7/11 8/11 9/11 10/11 11/11
Fuente: DNP, DDS, SPSCV. 2010

32. Adjusted poverty severity (M2) for
any value of k (1997-2008)
0.40
0.35
0.30
0.25
1997
0.20 2003
2008
0.15 2010
0.10
0.05
0.00
1/11 2/11 3/11 4/11 5/11 6/11 7/11 8/11 9/11 10/11 11/11
Fuente: DNP, DDS, SPSCV. 2010

33. a) The lines don’t intersect: Poverty has
decreased between 1997 and 2010 for any
value of k
b) The line ordering remains: Poverty has
decrease for all measures: headcount ratio,
adjusted headcount ratio, gap and severity

34. The poverty dominance analysis
allows to make conclusions that
are independet from the cut-off
point k selection

35. Further research
• Dimensions and variables for possible
consideration
– Quality of services: education, health, water provision
– Security and dignity
– Political participation
– Quality of employment
• Alternative schemes for assigning weights
– Data driven
– Budget allocation
– Collective preferences (participative processes)

36. MPI Colombia as an
instrument for public policy
design
3 applications

37. 1
Poverty maps
Municipal MPI Colombia
(geographical targeting)

38. Municipal MPI Colombia
Headcount ratio, urban-rural areas, 2005
Municipal poverty headcount ratio for urban Municipal poverty headcount ratio for rural areas,
areas, k=5/15, 2005 k=5/15, 2005
MPI proxy based on Census Data 2005

39. 2
MPI-Colombia within the
methodology for social
promotion from the extreme
poverty strategy

40. A family is “promoted” from if:
Sufficient condition:
& I P M
Not in extreme income Not multidimensionally
poverty poor

41. 3
MPI-Colombia goal for the
Government’s National
Development Plan 2010-
2014 & for monitoring
poverty reduction

42. From multidimensional to
multisectorial…
15 goals I P M

43. If the Plan is accomplished, if
every ministry makes its job
and spends the committed
resources, the MPI decreases to
22% (more than 3 million
people out of poverty).

44. Poverty committee: monitoring poverty reduction
▪ Leaders
– Counselor for the Presidency
– National Planning Department
▪ Permanent members
– Ministry of Health
– Ministry of Labor
– Ministry of Housing
– Ministry of Agriculture
– Ministry of Education
– Ministry of Finance
MANDATORY PRESENCE
The President of Colombia
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45. 0%-10% avance 10%-25% avance >25% avance
Línea Base Meta Meta
Pobreza Dato 2010 Análisis
PND 2008 2011 cuatrienio
MPI (Multidimensional Poverty) 34.7% 30.4% 25.6% 22.5%
 Educational achievement (≥15 yrs) 58.8% 55.4% 54.3% 56.8%
A(1)
 Literacy (≥15 yrs) 14.2% 13.2% 12.5% 12.0%
 School attendance (6-16) 5.4% 4.6% 4.4% 5.0%
 No school lag (7-17) 33.4% 35.1% 33.9% 33.1%
B(2)
 Access to child care services (0-5) 12.1% 11.8% 11.5% 10.6%
 Children not working (12-17) 5.5% 4.6% 3.6% 2.9%
 Long-term unemployment 9.6% 9.9% 9.5% 9.3%
C(3)
 Formal employment 80.6% 80.9% 77.2% 74.7%
 Health insurance 24.2% 21.0% 8.7% 0.5%
D(4)
 Access to health services 8.9% 6.9% 5.3% 2.4%
 Access to water source 12.9% 11.6% 11.2% 10.9%
 Adequate sewage system 14.1% 12.0% 11.6% 11.3%
E(5)  Adequate floors 7.5% 6.3% 5.9% 5.6%
 Adequate external walls 3.1% 3.0% 2.4% 2.1%
 No critical overcrowding
15.7% 15.1% 11.1% 8.4%
FUENTE: DNP-DDS-SPSCV

46. “If it was not for the hope that the scientific study of
social actions can lead to practical results in favor of
social improvement, not few students would have
considered the time devoted to these studies as lost.
This is true for all social sciences but especially for
economics. Because this aspect is precisely what
interests or inspires the most”.
PIGOU, A. C. (1920). The economics of welfare

47. Thank you
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