Ninety-Three Percent of Dhaka Slum Residents Live in Multidimensional Poverty

More than nine out of ten people living in the slums of Dhaka, one of the largest megacities on Earth, are multidimensionally poor, according to a new study that goes far beyond household income to measure deprivation across health, education, living standards and economic security. The research, conducted by economists Neshlihan Mostafa, Md. Khaled Saifullah and Shamil M. Al-Islam of Independent University, Bangladesh, surveyed 747 low-income households comprising 3,322 individuals across the Bangladeshi capital and applied the Alkire-Foster method of multidimensional poverty measurement to quantify not only how many people are poor, but how intensely they are deprived. The headline figures are stark: the multidimensional poverty headcount ratio for the full sample stands at 93 percent, the average intensity of deprivation among the poor is 49 percent, and the adjusted headcount ratio, the measure that combines incidence and intensity into a single index value, reaches 45.6 percent.

The study’s central methodological innovation lies in its four-dimensional framework. The global Multidimensional Poverty Index, developed at the Oxford Poverty and Human Development Initiative and used by the United Nations Development Programme, traditionally aggregates three dimensions: health, education and standard of living. Mostafa and her colleagues augmented this canonical construct with an additional economic dimension designed to capture the financial fragility that defines urban poverty in a megacity context, where cash incomes are erratic, savings instruments are inaccessible to most, and shocks such as illness, eviction or job loss can instantly tip a household into destitution. By embedding economic indicators alongside the conventional triad, the researchers argue that the resulting index better reflects the lived reality of slum households whose monetary hardship is inseparable from their deficits in schooling, nutrition, housing quality and access to basic services.

The Alkire-Foster counting approach, which underpins the analysis, works by first defining a set of deprivation indicators grouped under each dimension, establishing a deprivation cutoff for each indicator, and then identifying individuals who fall below those cutoffs. Each person accumulates a deprivation score equal to the weighted sum of the dimensions in which they are deprived. A poverty cutoff then determines whether that person is classified as multidimensionally poor. Three headline statistics emerge from this machinery: the headcount ratio, which reports the proportion of people who are poor; the intensity of poverty, which reports the average share of weighted deprivations poor people experience; and the adjusted headcount ratio, obtained by multiplying the two, which serves as the headline index and has the useful property of being decomposable across population subgroups, dimensions and indicators.

When the sample was disaggregated by the sex of the household head, a pattern emerged with important policy implications. Male-headed households, which form the majority of the sample, recorded a headcount ratio of 96 percent, an intensity of 49.6 percent and an adjusted headcount ratio of 47.5 percent. Female-headed households fared somewhat better on every metric, with a headcount ratio of 90 percent, an intensity of 48.3 percent and an adjusted headcount ratio of 43.6 percent. The finding runs counter to a widespread assumption in development economics that female-headed households are uniformly worse off, and it echoes results from other contexts, including earlier research in Nicaragua, where female-headed households were likewise found not to be uniformly more deprived. The authors suggest that women who head households in Dhaka’s slums may possess stronger social networks, engagement in income-generating activities such as domestic work and garment-sector employment, and, in some cases, access to remittances, which together cushion some dimensions of deprivation.

The context of the study is critical to interpreting its magnitude. Dhaka has grown explosively over recent decades as climate pressures, riverbank erosion, floods and rural landlessness push migrants toward the capital, where they overwhelmingly settle in informal settlements characterized by overcrowding, insecure tenure and minimal infrastructure. Bangladesh’s own census of slum areas and floating population documents hundreds of thousands of slum households concentrated in Dhaka and Chattogram, and the United Nations’ World Urbanization Prospects project continued rapid urbanization across South Asia through mid-century. Scholars have long warned that conventional income-based poverty lines systematically understate urban deprivation because cities monetize nearly every basic need: water, sanitation, cooking fuel, housing and transport all carry price tags that rural livelihoods often avoid. A household can earn above the national poverty line and still lack safe drinking water, adequate floor space, reliable electricity or any assets to fall back on.

This measurement problem is precisely what the multidimensional approach is designed to solve, and the Dhaka results illustrate its power. In income-poor terms, some slum residents might appear marginally above thresholds; in multidimensional terms, 93 percent are poor. The gap between monetary and multidimensional measurement has been documented globally, with researchers showing that the two approaches identify overlapping but distinct poverty populations, and that a combined approach captures deprivations that either method alone misses. For megacities, where informal settlements sit adjacent to wealthy commercial districts, the adjusted headcount ratio offers city governments a diagnostic instrument that pins down exactly which deprivations dominate and where interventions would yield the largest reductions in the index.

The study was ethically rigorous in its execution. Institutional review board clearance was obtained from Independent University, Bangladesh in September 2022, and every participant signed a written informed consent form, with fingerprint attestation and a witness signature permitted for illiterate respondents. The research was funded by the university under a sponsored research grant, and the authors declare no conflicts of interest. Survey data cannot be shared publicly without the funder’s permission because consent forms specified that responses would remain confidential, though reasonable requests can be accommodated through the funder. These procedural safeguards matter for research in informal settlements, where residents are often wary of enumeration exercises that could be linked to eviction or taxation.

The policy recommendations flowing from the findings are concrete. The authors call on the Department of Youth Development, the Ministry of Education and the Dhaka North and South City Corporations to prioritize job creation, quality education and targeted training programs that equip slum residents with the skills demanded by the formal labor market. They further recommend expanding microcredit activities in cities, building on evidence that financial inclusion supports progress toward the Sustainable Development Goals by enabling asset accumulation, small enterprise formation and consumption smoothing. The emphasis on skills and employment reflects the study’s economic dimension: in an urban labor market saturated with informal work, deprivation in earnings capability propagates directly into deprivations in nutrition, schooling and housing quality, so interventions that raise earning capacity can shift all four dimensions simultaneously.

Beyond Dhaka, the study contributes to a rapidly growing literature that applies multidimensional poverty measurement to urban settings worldwide, from secondary cities in Africa to slums in Varanasi, informal settlements in Lagos and peri-urban districts of Latin America. Its four-dimensional augmentation offers a template for other megacity studies, particularly in South Asia where slum populations are projected to keep growing. The decomposition properties of the Alkire-Foster method mean future surveys could track whether the adjusted headcount ratio of 45.6 percent falls over time, which dimensions drive the change, and whether the gender gap between male- and female-headed households narrows or widens. What the current figures make unambiguously clear is that poverty in Dhaka’s slums is near-universal in incidence and severe in depth, and that measuring it through income alone would obscure the scale of the challenge confronting one of the world’s most densely populated cities.

The choice of Dhaka as a study site carries analytical weight beyond its size. The city’s slum settlements are among the most densely populated informal areas in the world, and the households surveyed there experience a form of deprivation that differs qualitatively from rural poverty. Because nearly every necessity in an urban environment must be purchased, indicators such as cooking fuel, drinking water and sanitation function as direct financial burdens, which helps explain why the authors’ added economic dimension aligns so closely with the deprivations captured under standard of living.

The gendered decomposition also illustrates the practical value of the Alkire-Foster framework’s subgroup decomposability. By computing separate indices for male-headed and female-headed households, the study transforms a single citywide statistic into a comparative diagnostic. The roughly four-point difference in adjusted headcount ratios between the two groups is modest in absolute terms, but its direction challenges targeting heuristics used by NGOs and municipal agencies that assume female household headship signals greater vulnerability. In Dhaka’s slums, the evidence suggests, headship alone is an unreliable proxy for deprivation, and screening households on indicator-level deficits rather than demographic categories would allocate resources more accurately.

The recommendation to expand urban microcredit connects the findings to Bangladesh’s own institutional history, since the country pioneered group-based microfinance models that have since spread globally. Evidence cited in the broader literature links financial inclusion to asset accumulation and consumption smoothing, both of which speak directly to the economic fragility the study measures. At the same time, the authors’ emphasis on job creation and skills training through the Department of Youth Development and the Ministry of Education acknowledges that credit alone cannot resolve deprivations rooted in labor market structure. For city corporations, the adjusted headcount ratio of 45.6 percent provides a baseline against which future surveys can judge whether combined interventions in employment, schooling and services measurably reduce multidimensional poverty across the four dimensions.

Subject of Research: Measurement of multidimensional poverty among low-income slum households in Dhaka, Bangladesh, using an augmented four-dimensional Alkire-Foster index.

Article Title: Multidimensional poverty in a megacity: evidence from low-income households of Dhaka

Article References: Mostafa, N., Saifullah, M. K., & Al-Islam, S. M. (2026). Multidimensional poverty in a megacity: evidence from low-income households of Dhaka. International Review of Economics, 73(2), Article 36. https://doi.org/10.1007/s12232-026-00547-9

Image Credits: AI Generated

DOI: 10.1007/s12232-026-00547-9

Keywords: multidimensional poverty, Dhaka, urban slums, Alkire-Foster method, Bangladesh, megacity, female-headed households, poverty measurement, adjusted headcount ratio, Sustainable Development Goals, microcredit, urban economics