Poverty measurement: evolving concepts and measurement frameworks

The traditional approach to defining and measuring poverty exclusively in monetary terms remains highly relevant given the focus on economic resources needed to secure an acceptable standard of living. The multidimensional form of poverty has also received increasing recognition, however, since health, education, and other relational resources have both constitutive and instrumental value in determining well-being. This shift in the core concept has major implications for assessment of poverty and insights into the nature of deprivation. This chapter discusses the key conceptual and measurement issues involved in understanding poverty as both unidimensional and multidimensional constructs, with a particular focus on the historical context, current practices, and further needs. If the goal is to guide policymaking, the core insights needed from poverty analyses must include information on not just who is poor and how prevalent poverty is but also the nature of deprivation and what policy actions or resources would be needed to reduce or remove poverty.