Latin America needs new indicators to measure poverty efficiently

The battle against poverty in Latin America would benefit with the incorporation of socio-emotional factors such as psychological wellbeing, physical safety, discrimination, political liberty, or empowerment, according to the report Dimensiones faltantes en la medición de la pobreza (Missing dimensions in the measurement of poverty), carried out by CAF, Development Bank of Latin America, and the Oxford Poverty & Human Development Initiative of Oxford University. 

The report states that these variables are essential to determine if a person is poor or not, so they should be taken into consideration in future classifications both from the academic as well as governmental spheres. 

Ana Mercedes Botero, CAF´s Director of Social Innovation, explained "The absence of these data produces a discrepancy between the way in which poverty is measured and the situation of low income people. For this reason, the purpose of the report is to promote a debate regarding the need to incorporate these new dimensions, thus contributing to the development of projects, programs, and public policies aimed at the comprehensive and sustainable development of Latin America".  

According to the report, the lack of this type of international indicators represents a critical bottleneck for the empiric studies to be able to improve the measurement of development. 

Mireya Vargas, Researcher at OPHI-Oxford University and coordinator of the report, states " One of the main challenges of these dimensions is related to its measurement and to having data that enables more complex analysis to understand poverty as a multidimensional phenomenon. As they are subjective variables, in coming years we must find the most adequate mechanisms to quantify them and include them in the comprehensive classifications of poverty".  

Missing dimensions in the measurement of poverty identifies six indicators that must be added to the existing ones, to achieve a reliable classification of poverty in Latin America: 

1)      Empowerment: acting under pressure or obligation 

2)      Physical safety: being a victim of robbery or physical violence 

3)      Capacity to walk the path of life without being embarrassed: social stigmatization of poverty, discrimination, or humiliation 

4)      Quality of the employment: Informality, sub-employment, poor working conditions 

5)      Social connectivity: lack of social protection networks or isolation  

6)      Psychological wellbeing: lack of meaning in life, low self-esteem 

Botero states "People in situation of poverty consider that these types of variables are important to understand their condition. For this reason, the use of these new indicators implies a double benefit, as on the one hand, it places the focus of public policies on the real needs of the most vulnerable populations, and on the other hand, it enables to address poverty from a multidimensional approach". 

The report states that if these dimensions are not taken into consideration, there is a risk that poverty will not be addressed in all its variants, as each dimension is connected with the essential aspects of this pehnomenon.  

To access the complete report, click here: http://scioteca.caf.com/handle/123456789/833

To read the authors' blog, click here: www.caf.com/es/visiones