Hpi

Human Poverty Index

1. Human Poverty Index (HPI) Mostafijur Rahaman UGB, Malda

2. The Human Poverty Index is an indicator of the standard of living in a country, developed by United Nations (UN) to complement the Human Development Index (HDI) and was first reported as part of Human Development report in 1997. it was considered to better reflect the extent of deprivation in developed countries compared to HDI. In 2010 it was supplanted by the UN’s Multidimensional Poverty Index. The HPI concentrates on the deprivation in the three essential elements of human life already reflect in the HDI: Longevity, Knowledge and a decent Standard of Living.

3. Objectives: To show the rate of Human Poverty of any country. To make comparison among developed and developing countries. To emphasize this nature of life length, knowledge and a decent standard of living.

4. HPI Dimensions 2007-08

5. The Human Poverty Index for developing countries (HPI-1) While the HDI measures average achievement, the HPI-1 measures deprivations in three basic dimensions of human development captured in the HDI: A long and healthy life – vulnerability to death at a relatively early age, as measured by the probability at birth of not surviving to age 40. knowledge – exclusion from the world of reading and communications, as measured by the adult literacy rate. A decent standard of living – lack of access to overall economic provisioning, as measured by the unweighted average of two indicators, the percentage of the population not using an improved water source and the percentage of children under weight-for-average. Calculating the HPI-1 is more straightforward than calculating the HDI. The indicators used to measure the deprivation already normalized between 0 and 100 (because they are expressed in percentages), so there is no need to create dimension indices as for the HDI

6. Calculating the HPI-1 Measuring deprivation in a decent standard of living: An underweighted average of two indicators is used to measure deprivation in a decent standard of living. Unweighted average = ½ (population not using an improved water source) + ½ (children under weight-for-age) A sample calculation: Bolivia Percentage of population not using an improved water source = 15% Percentage of children under weight-for-age = 8% Unweighted average = ½ (15) + ½ (8) = 11.3% 2. Calculating the HPI-1 The formula used to calculate the HPI-1 is as follows: HPI-1 = = [1/4 (P₁ α +P₂ α +P₃ α +)] 1/α where, P₁ = Probability at birth of not surviving to age 40 (times 100) P₂ = Adult literacy rate P₃ = Unweighted average of population not using an improved water source and children under weight-for-age α = 3   This last indicator is made up by the simple average of three basic variables:- The percentage of the population without access to drinking water (P31) The percentage of population without access to health services (P32). The percentage of underweight children aged less than five (P33).

7. SAARC COUNTRIES P1(D.P in %) P2(L.R in %) P3 P3(%) HPI-1 P31(%) P32(%) P33(%) Afghanistan 42 47.53 20 10 20 16.66 39.58 Bangladesh 31.5 72.76 36 25 41 34 53.36 Bhutan 12.04 64.55 31 19 16 22 45.43 India 21.9 74.04 14 70 37 40.33 54.36 Nepal 15 64.7 20 12 8 13.33 45.17 Maldives 25.21 99.32 9 15 15 13 62.29 Pakistan 12.4 58 12 25 40 25.66 41.47 Srilanka 6.5 96.3 8 12.5 20 13.5 66.89 Human Poverty Index (HPI-1) for SAARC Countries

8. The Human Poverty Index for OECD countries (HPI-2) The HPI-2 measures deprivations in the same dimensions as the HPI-1 and also captures social exclusion. Thus it reflects deprivation in four dimensions: A long and healthy life – vulnerability to death at a relatively early age, as measured by the probability at birth of not surviving to age 60. Knowledge – exclusion from the word of reading and communications, as measured by the percentage of adults (ages 16-65) lacking functional literacy skills. A decent standard of living – as measured by the percentage of people living below the income poverty line (50% of median adjusted household disposable income) Social exclusion – as measured by the rate of long-term unemployment (12 months or more)

9. Calculating the HPI-2 The formula used to calculate the HPI-2 as follows: HPI-2 = [1/4 (P₁ α +P₂ α +P₃ α +P₄ α )] 1/α Where, P₁ = Probability at birth of not surviving to age 60 (times 100) P₂ = Percentage of adults lacking functional literacy skills P₃ = Percentage of population below income poverty line (50% of median adjusted household disposable income) P₄ = Rate of long term unemployment(lasting 12 months or more) α = 3 A sample calculation: Canada P₁ = 8.1% P₂ = 14.6% P₃ = 11.4% P₄ = 0.5% HPI-2 = [1/4(8.1 3 + 14.6 3 + 11.4 3 + 0.5 3 ) ] 1/3 = 10.9

10. HUMAN POVERTY INDEX (HPI-2) FOR OCED COUNTRIES Country Probability at birth of not surviving to age 60 (%) People lacking functional literacy skills (%) Long-term unemployment (%) Population below 50% of median income (%) HPI-2 Rank Sweden 6.7 7.5 1.1 6.5 6.3 1 Noreway 7.9 7.9 0.5 6.4 6.8 2 Netherlands 8.3 10.5 1.8 7.3 8.1 3 Finland 9.4 10.4 1.8 5.4 8.1 4 Denmark 10.3 9.6 0.8 5.6 8.2 5 Germany 8.6 14.4 5.8 8.4 10.3 6 Switzarland 7.2 15.9 1.5 7.6 10.7 7 Canada 8.1 14.6 0.5 11.4 10.9 8 Luxemboug 9.2 — 1.2 6 11.1 9 Austria 8.8 — 1.3 7.7 11.1 10 France 8.9 — 4.1 7.3 11.2 11 Japan 6.9 — 1.3 11.8 11.7 12 Australia 7.3 17 0.9 12.2 12.1 13 Belgium 9.3 18.4 4.6 8 12.4 14 Spain 7.7 — 2.2 14.2 12.5 15 United Kingdom 8.7 21.8 1.2 12.5 14.8 16 United Staes 11.6 20 0.4 17 15.4 17 Ireland 8.7 22.6 1.5 16.2 16 18 Italy 7.7 47 3.4 12.7 29.8 19

11. Why α = 3 in calculating the HPI-1 and HPI-2 The value of α has an important impact on the value of HPI. If α = 1, the HPI is the average of its dimensions. As α rises, greater weight is given to the dimension in which there is the most deprivation. Thus as α increase toward infinity, the HPI will tend towards the value of the dimension in which deprivation is greatest (for Bolivia, the example used to calculate the HPI-1, would be 15.5, equal to the probability at birth of not surviving age 40) In this report the value 3 is used to give additional but not overwhelming weight to areas of more acute deprivation. For a detailed analysis the HPI’s mathematical formulation, see Sudhir Anand and Amartya Sen’s “Concept of Human Development and Poverty: a Multidimensional Prospective” and the technical note in Human Development report 1997.