Digital Inclusion and Enhanced Multidimensional Poverty Assessment: Evidence from Low-Income Communities in Kuala Lumpur

Malaysia’s aspiration to attain high-income status necessitates not only economic growth but also a deeper understanding of poverty that goes beyond financial indicators. The Multidimensional Poverty Index (MPI) for Malaysia is designed to be comprehensive, considering a wide range of factors relevant to the diverse population of the country. Unlike traditional income-based approaches, our study goes beyond money to capture how poverty affects households across multiple dimensions. The MPI reveals important insights that standard measures often miss—showing which families struggle with education, health, housing, or digital access, not just income. Therefore, this study aims to enhance the Multidimensional Poverty Index for the Malaysian context by identifying and incorporating new dimensions and indicators to better capture the complexity of poverty in the country based on an empirical study in Kuala Lumpur, Malaysia. The MPI represents a significant advancement, offering a multidimensional framework for poverty measurement. Based on results in Kuala Lumpur, 38.7% of households were found to be multidimensionally poor. This means that nearly 4 out of every 10 households in this study experienced deprivations in multiple basic needs, not just income. Household size also significantly influences the risk of multidimensional poverty, with households of more than six members being over three times more likely to be poor, primarily due to higher dependency ratios and greater consumption burdens.