1 / 18

1. Introduction

An Innovative Measurement Method of Basic Needs Mixing Objective and Subjective Information Work in Progress Christophe Muller DEFI, AMSE, Aix-Marseille University July 2011. 1. Introduction. ▪ A proper notion of poverty in society Corresponds to the well-thought opinions of citizens

mason
Download Presentation

1. Introduction

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. An Innovative Measurement Method of Basic Needs Mixing Objective and Subjective InformationWork in Progress Christophe MullerDEFI, AMSE, Aix-Marseille University July 2011

  2. 1. Introduction • ▪ A proper notion of poverty in society • Corresponds to the well-thought opinions of citizens • Conflicts with current approaches of poverty lines and poverty statistics • Expert opinions • Biological benchmarks • Arbitrary statistics (1 $ a day, half median...) • What people think poverty means ▪ Uses of Self-Reported Basic Needs • Poverty and income distribution analyses • Individual and household decision models

  3. Potential issues with self-evaluated basic needs • -Comparability across respondents • Non independence from outcomes to explain • Application to assistance system • Financial Incentives to lie • Less reliable than objective measures • Comparing self-assessed needs with consumption for each household (i.e. distribution matches) yields too noisy results to be usable • -hard to observe accurately • insincere answers • unclear to respondent • no clues • erratic individual effects

  4. Potential advantages of self-evaluated basic needs • There is reliability (~ 0.5) • how to best extract the relevant core information • No consensus on the poverty line method anyway • Unreasonable methods are not rare • Using nutritional minima is unrealistic for many countries • - not subject to the ignorance of individual situations by external observers • utility-consistent if individuals know what is best for them • do not always require equivalence scales

  5. 2. Context and Data • Republic of Mauritius in 2006/7 • 2006 Household Budget Survey • Nutritional Poverty Profile • Request for adaption of poverty statistics to an advanced development stage • A Special Survey for Measuring Subjective Basic Needs • 2008 Living Condition Survey • Collaboration CSO-UNDP • Aim: getting better poverty lines anchored on realistic basic needs • Sub-sample of 2006 Household Budget Survey • Uses of the new poverty lines • Official poverty statistics • Targeting statistics • Design and improvement of social policies in Mauritius

  6. Our Strategy for Basic Needs Indicators • Selecting logically consistent answers • An observed household is deemed consistent when: • either (1) its consumption is in excess of its self-stated basic needs AND it declares itself as non-destitute in a considered qualitative question; • or (2) its consumption is below its self-stated basic needs AND it declares itself as destitute in a considered qualitative question. • For different categories of goods • Controlling for individual erratic effects • - Concentrating on food basic needs: the better observed needs and consumption • Aggregating to use a central tendency as anchor for the poverty line estimation • Excluding outliers and mistakes • Controlling for individual effects: • * A new econometric method for cross-section regressions • * Extracting individual effects from other basic needs equations

  7. 3. Estimated Basic Needs

  8. A New Method for Individual Effect Control • Taking advantage of similar phenomena simultaneously measured for the same individuals • Self-Assessment of basic needs for several consumption categories: food, housing, clothing, health, education • SMij, j= 1,...5 are the goods, i is the individual index • The model: SMij = gj(Xi) fi uij • Xi are typical independent variables, • fi is the unobserved individual effect variable • uij are error terms

  9. Simple estimators of individual effects fi can be generated from each secondary good equation • Empirical analogs of: • ln(SMij ) – Mean(ln(SMij)) - gj(Xi) + Mean(gj(Xi) ) • For j different from 1 • To include in the ln(SM1) equation for food.

  10. Correlates of Consistent Log Food Basic Needs • Number of obs = 920 R-squared = 0.4793 • Coef. Std. Err. t P>|t| • ei_cloth | .0959786 .0171521 5.60 0.000 • ei_housing | .0965442 .0248727 3.88 0.000 • ei_health | .0208055 .0127216 1.64 0.102 • age | .0016652 .0013742 1.21 0.226 • room | .0016167 .0074483 0.22 0.828 • sex | -.1685794 .0472513 -3.57 0.000 • n13 | .0923126 .0240365 3.84 0.000 • n410 | .0687213 .0181334 3.79 0.000 • n1116 | .1238146 .0183668 6.74 0.000 • n1721 | .1175631 .0185373 6.34 0.000 • n2259 | .152178 .0125792 12.10 0.000 • n60 | .1980666 .0254644 7.78 0.000 • district_d~2 | .0792172 .0809322 0.98 0.328 • district_d~3 | .1448836 .0819476 1.77 0.077 • district_d~4 | .2223407 .0802721 2.77 0.006 • district_d~5 | .2521609 .083598 3.02 0.003 • district_d~6 | .1573245 .0841895 1.87 0.062 • district_d~7 | .0275595 .0435975 0.63 0.527 • district_d~8 | .2928428 .0860717 3.40 0.001 • district_d~9 | .2066021 .0919369 2.25 0.025 • district_~10 | .0630789 .0845483 0.75 0.456

  11. building_d~2 | .0173235 .0265064 0.65 0.514 • tenure_dum~1 | .060169 .0454859 1.32 0.186 • tenure_dum~3 | .0426515 .0536443 0.80 0.427 • educ_no~y | .0172653 .0292946 0.59 0.556 • educ_high | .0195854 .0291216 0.67 0.501 • educ_co~e | .0151804 .0567269 0.27 0.789 • activit~1 | .0595621 .0360397 1.65 0.099 • activit~2 | .0626847 .0416989 1.50 0.133 • activit~4 | .1103974 .0553114 2.00 0.046 • cooklpg_du~y | .030092 .042303 0.71 0.477 • lcsmarital~1 | .0199681 .041463 0.48 0.630 • car_dummy | .0156389 .0375727 0.42 0.677 • van_dummy | .0630376 .0651886 0.97 0.334 • dcab_dummy | .0133242 .0798519 0.17 0.868 • mcycle_dummy | .0440583 .0260842 1.69 0.092 • lsp_sq | -2.92e-09 3.79e-10 -7.69 0.000 • lsp | .0000894 9.43e-06 9.48 0.000 • savings | .0087989 .0238832 0.37 0.713 • priority_~p1 | .0503988 .0308288 1.63 0.102 • priority_e~4 | .0343247 .0323022 1.06 0.288 • priority_e~5 | .0330141 .0434224 0.76 0.447 • priority_e~8 | .0320459 .0384065 0.83 0.404 • reqsocialaid | -.0343265 .0314591 -1.09 0.276 • check1 | -.0820029 .0311165 -2.64 0.009 • telephone | -1.44e-08 6.21e-09 -2.32 0.021 • urbanrural | -.0862697 .037277 -2.31 0.021 • _cons | 7.536526 .1631736 46.19 0.000

  12. Poverty Line Estimation • - Accounting for consumer substitutions • Based on an estimated food Engel curve • Linearized QAIDS • Mean self-assessment of their food basic needs by consistent households → defining food poverty thresholds: ZF • si = α + β ln(xi) + γ [ln(xi)]2 + Ni’ δ + εi, • Food budget share of household i = si • Total expenditure of household i = xi • Household and environment characteristics = Ni

  13. Robust regression estimates

  14. Solving for the poverty line • Once the parameters are estimated the poverty line, Zj is obtained by solving in Zthe following equation: • ZF/Z = Concentrated intercept + β ln(Z) + γ [ln(Z)]2 • For example with a Newton method • Poverty line for Mauritius: 2217 Rupees a month. • For Rodrigues: 1556 Rupees a month. • 7.06 percent of households are under the poverty line. • The poverty rates: • 7.79 percent in the whole Republic • 7.54 percent in Mauritius Island • 15.2 percent in Rodrigues.

  15. Table 1: Estimated Poverty Rates (%) Comparison of general poverty profile and nutritional poverty profile : Table 2 – Headcount poverty rates by urban & rural regions

  16. Table 2 –Headcount poverty rates by household size

  17. Higher general poverty for households led by : • Unemployed heads • Separated heads or widows • Female heads • Elderly heads • Little educated heads • Other categories of households especially affected by general poverty are: • Large size households • Households dwelling in disadvantaged areas in terms of the Relative Development Index used in Mauritius to characterized disadvantaged area. • Higher levels of poverty measures than with nutritional profile, while still realistic.

  18. 5. Conclusion • A new method mixing subjective and objective information to estimate basic needs and poverty lines • More realistic than current methods, except for extremely poor countries: eliciting the well-thought opinion of the population • Matching a special survey with typical household budget survey • Selection of consistent answers using destitution information • A new method for controlling for individual effects in cross sections • Large number of independent variables in basic needs equations, including individual effects, living standard, demographics, human capital, environment, collection checks, relative income… • Central tendency food to anchor poverty line instead of matching distributions of needs and consumptions • Yields an ‘objective’ core from subjective data • Application to poverty analysis and social policy in mauritius

More Related