MEASUREMENT AND POVERTY MAPPING

1. UPA Package 1, Module 2 MEASUREMENT AND POVERTY MAPPING

2. POVERTY: Theory, Measurement, Policy and Administration - Measurement of Poverty -

3. Background Different poverty measures • Different poverty measures emphasize different aspects of poverty • Poverty line emphasizes income • Minimum Basic Needs looks at poverty as a form of deprivation • Human Development Index (HDI) focuses on life expectancy, knowledge and real per capita income

4. Background Selection of appropriate poverty measure • Understanding the different poverty measures lead to an informed selection of appropriate poverty measures for policymaking and analysis

5. Poverty Measurement • Poverty measurement is the process of determining the value or level of poverty • Ideas about poverty will determine what creates poverty, who are targeted as beneficiaries of anti-poverty programs, and what may be considered as signs of poverty

6. Basic Poverty Measures • Poverty Line (national/regional measure) • Minimum Basic Needs (local measure) • Human Development Index (global/ national measure) • Land-based poverty measures

7. Minimum Basic Needs • A strategy of prioritizing primary requirements to ensure that the basic needs for survival, security from physical harm, and enabling needs of the individual, family and community are attended to

8. Minimum Basic Needs

9. Minimum Basic Needs

10. Minimum Basic Needs

11. Human Development Index • This index attempts to measure the complex concept of human development by tracking the progress of three selected aspects of human life: Life expectancy, knowledge, and real capita income.

12. Human Development Index

13. Human Development Index

14. Human Development Index

15. Land-based Poverty Measures • Security of tenure • Access to public and social services • Access to infrastructure, including transportation, health and sanitation • Structural characteristics of dwelling units

16. Poverty Measures in the Philippines Food Threshold (FT) or Subsistence Threshold • Measured in terms of a basket which satisfies 100% of the Recommended Daily Allowance (RDA) for protein and 80% of the RDA for vitamins and other nutrients Poverty Threshold (PT) or Poverty Line • Computed as the ratio between FT with the expenditure

17. Current Practice in Poverty Measurement • Common practice starts by identifying a single monetary indicator of household welfare • The measure yi/zi for a typical household i denotes the level of welfare needed to escape poverty, where yiis the monetary indicator (either total consumption or total income over some period) and zi is a set of poverty lines • “Best practice” is to adjust for differences in the prices faced (over time or space, in as much detail as data permit) and household demographics

18. Current Practice in Poverty Measurement • Alternatively, one can introduce deflators at the first stage of defining the household welfare indicator and have only one poverty line • Another method is to set the z’s as a constant proportion of the mean for some subgroup to which i belongs • Finally an aggregate poverty measure is identified, which summarize the information contained

19. Aggregate Poverty Measures Foster-Greer-Thorbecke (FGT) poverty measures • Highly regarded because it meets all the axioms desirable in income-based poverty measures and contains a parameter, , that can be set according to the society’s sensitivity to the income distribution among the poor where is the vector of household incomes in increasing order, is the predetermined poverty line, is the income shortfall of the ith household, is the number of poor households (having income no greater than ) and is the total number of households

20. Aggregate Poverty Measures Headcount Index • When  = 0, the FGT measure collapses to the headcount index, or the percentage of the population that is below the poverty line, This measure, while useful for general poverty comparisons, is insensitive to differences in the depth of poverty

21. Aggregate Poverty Measures Poverty Gap • When  = 1, the FGT measure gives the poverty gap, a measure of the average depth of poverty,

22. Aggregate Poverty Measures • When  = 2, the FGT measure weights heavily income inequality among the poor. An additional peso that reaches the poor will matter more than one reaching the only slightly poor

23. Aggregate Poverty Measures • The use of FGT class of measures require the definition of a poverty line and is calculated on the basis of disaggregated data (either household level, or aggregated for a few groups such as quintiles) • The FGT measure can be decomposed for population subgroups. If the population is divided into m collections of households with ordered income vector and population size ,

24. Aggregate Poverty Measures • is additively decomposable with population share weights • The decomposition allows a quantitative, as well as qualitative, assessment of the effect of changes in subgroup poverty on total poverty • In fact, increased poverty in a subgroup will increase total poverty at a rate given by the population share , that is, the larger the population share, the greater the impact • The quantity may be interpreted as the total contribution of a subgroup to overall poverty while is the percentage contribution of subgroup .

25. Measuring Urban Poverty • Measuring urban poverty requires extensive set of reliable cross-sectional and time-serial data for policymaking and analysis • Even in data-rich environments, there is a need to integrate disparate census-based and survey data sets in order to derive spatially-disaggregate measures of urban poverty • GIS is a powerful technology that can be utilized in geographical targeting of poverty alleviation programs