The Poverty Probability Index (PPI®) is a straightforward yet statistically robust tool designed for organisations and businesses dedicated to serving impoverished communities. By posing 10 simple questions regarding a household’s characteristics and asset ownership, the PPI calculates the probability of that household living below a specific poverty line. This enables organisations to objectively identify clients, customers, or employees who are likely experiencing poverty, facilitating informed assessments and strategic decisions.
Operating in areas with high poverty rates doesn’t automatically provide insights into the specific households an organisation reaches. Collecting objective poverty data from all or a representative sample of these households allows organisations to:
Armed with this data, organisations can make strategic decisions and offer stakeholders concrete evidence of the organization’s impact on poverty alleviation.
The PPI is tailored to align with the operational realities and budgets of diverse organisations, ensuring ease of use without compromising accuracy. A household member can answer the 10 questions in approximately 5 to 10 minutes, covering topics like roofing material and children’s school attendance. The responses are scored to indicate the likelihood of the household living below national and international poverty thresholds.
An organisation in Colombia offering vocational training to the nation’s poorest citizens employs the PPI to assess if they are effectively reaching their target demographic. If a client scores 30 on the PPI, the corresponding look-up table indicates a 42.6% chance that the household lives below the $2.50/day poverty line. Surveying a representative sample of clients revealed an average likelihood of 60.7% living below this threshold, providing valuable insights for the organisation’s outreach efforts.
The PPI is currently managed by Innovations for Poverty Action (IPA), with a dedicated team overseeing its development and daily operations.
Innovations for Poverty Action (IPA) is a non-profit organization dedicated to identifying and promoting effective solutions to global poverty. By collaborating with researchers and decision-makers, IPA designs, evaluates, and refines evidence-based programs and policies. Their approach focuses on generating high-quality, policy-relevant evidence, effectively communicating findings, and equipping decision-makers to apply the insights through strong partnerships.
In July 2016, the Poverty Probability Index (PPI) transitioned from Grameen Foundation to IPA for long-term sustainability, accompanied by a new construction methodology. In October 2017, the tool was rebranded from the Progress out of Poverty Index to better reflect its purpose and broader applications.