Accounting for drinking water quality in measuring multidimensional poverty in Ethiopia

The Multidimensional Poverty Index is used increasingly to measure poverty in developing countries. The index is constructed using selected indicators that cover health, education, and living standards dimensions. The accuracy of this tool, however, depends on how each indicator is measured. This study explores the effect of accounting for water quality in multidimensional poverty measurement. Access to drinking water is traditionally measured by water source types. The study uses a more comprehensive measure, access to safely managed drinking water services, which are free from E. coli contamination, available when needed and accessible on premises in line with Sustainable Development Goal target 6.1. The study finds that the new measure increases national multidimensional headcount poverty by 5-13 percentage points, which would mean that 5-13 million more people are multidimensionally poor. It also increases the poverty level in urban areas to a greater extent than in rural areas. The finding is robust to changes in water contamination risk levels and Multidimensional Poverty Index aggregation approaches and weighting structures.