Efforts to alleviate poverty have largely relied on consumption- or income-based measurements. However, poverty is not solely about fulfilling basic needs; it also reflects real-life conditions more directly through additional dimensions such as education, health, and access to basic services.
This issue formed part of the Research Series programme at the Faculty of Economics and Business at Universitas Gadjah Mada (FEB UGM). The guest speaker was Putu Geniki Lavinia Natih, an economist from the University of Indonesia who examined multidimensional poverty in her doctoral research at the University of Oxford.
She found significant mismatches between consumption-based poverty and multidimensional poverty in various studies. For instance, households identified as poor may differ depending on the measurement approach applied.
For Niki, the consumption-based measure is not inherently flawed. Rather, it needs to be complemented by a more comprehensive framework that captures the actual conditions and lived experiences of vulnerable communities.
“It is crucial to use a more holistic lens so that policies are evidence-based, better targeted, impactful, and effective. Adopting a multidimensional approach enables the government to identify the most pressing deprivations that need addressing, ensuring that resources are allocated more effectively,” Niki explained.
This approach refers to the Alkire-Foster (AF) method developed by Sabina Alkire and James Foster. This methodology assesses poverty from multiple dimensions, allows the use of various data types, and identifies deprivation in areas such as education and health vulnerability, as well as poverty intensity.
In her research, Niki employed a mixed-methods approach that combined quantitative and qualitative methods. She utilized data from Indonesia’s National Socioeconomic Survey (Susenas) and incorporated perspectives from local communities and regional policymakers. The city of Bogor served as a case study for testing the implementation of a multidimensional poverty index in an urban context.
“Many assume that urban areas are less vulnerable than rural areas, whereas urban poverty issues are equally real. Through this method, we developed an index structure that is most relevant for Bogor City and can serve as a policy monitoring tool,” she added.
The national implementation of multidimensional poverty measurement also presents conceptual and technical challenges. Niki noted that Indonesia does not yet have a nationally adopted multidimensional poverty index that can support the measurement of Sustainable Development Goal (SDG) 1 on ending poverty in all its forms everywhere. Flexibility in adjusting indicators remains necessary to accommodate local needs, particularly differences between urban and rural characteristics.
“Hopefully, the multidimensional approach can complement, rather than replace, the existing consumption-based poverty measure. In doing so, we can view poverty more comprehensively and design policies that are more responsive to community needs,” Niki concluded.
The full video of the Research Series program, “Rethinking Poverty Measurement Through a Multidimensional Approach in Indonesia,” is available at: http://ugm.id/MengukurUlangKemiskinanLewatPendekatanMultidimensidiIndonesia
Report by: Shofi Hawa Anjani
Editor: Kurnia Ekaptiningrum
Sustainable Development Goals
