Which index measures poverty across multiple dimensions including health, education, and living standards?

• A. GDP
• B. Multidimensional Poverty Index
• C. Gini Coefficient
• D. HDI

Answer: (B)

This item tests measuring poverty across more than just income, by looking at multiple areas where people can be deprived. The Multidimensional Poverty Index is designed to capture those everyday struggles by examining health, education, and living standards. It considers specific deprivations, such as poor health outcomes, limited schooling, or lacking basic living conditions like clean water, sanitation, electricity, and decent housing. A person is considered multidimensionally poor if they experience deprivations in a substantial portion of these indicators, and the index also reflects how many deprivations they face, not just whether they are poor or not. This approach provides a fuller picture of poverty than income alone.

GDP focuses only on total income and misses how that income translates into real living conditions. The Gini Coefficient measures inequality in income distribution rather than how many people lack essential services. The HDI combines life expectancy, education, and income to gauge general development, but it isn’t a direct measure of poverty across multiple deprivations. Hence, the Multidimensional Poverty Index best fits the description.