Poverty reduction efforts are increasingly reliant on the use of indicators to measure the complex dimensions of poverty and evaluate the results of actions taken. The use of indicators is explained in part by the growing need to make a compelling case to policy-makers, funders, and other investors, as well as to demonstrate accountability for the effective use of funds invested in social initiatives.  Additionally, poverty reduction advocates highlight a number of other reasons to measure poverty, such as raising awareness and maintaining focus on the issue, dispelling myths about poverty and its origins, and informing communities about relevant trends to support actions that are targeted and appropriate.

Though the term “indicator” is used widely, as are “measurement” or “metric”, it can be used to refer to multiple different, but related ways to track variables: monitoring particular social or economic conditions; identifying trends within a population; setting targets or goals for specific programs or policies or evaluating their success; or establishing benchmarks for comparison with other communities. See Poverty Reduction Part III: Identifying Key Indicators for Poverty Reduction for a more detailed discussion about the different scale and focus of indicators.