Isla Margarita, Venezuela

October 8-10, 2003

High Level Meeting on Poverty, Equity and Social Inclusion

II Plenary Session: Challenges on the Measurement of Poverty and

Inequality Gaps

• Definition

• Metrics

• Parameters

• Inputs

• Methodology

• Usefulness

• Final thoughts

General Overview: Measuring Poverty

• Multidimensional phenomena.

• “Easy” to recognize.

• Hard to define.

• Agreement that it is about insufficiency:– Income.– Expenditure capacity (“consumption”).– Opportunities.– Access to services.

Definition

• Indicator that captures the multidimensionality of the concept best.

• That allows to quantify it.

• Indicator that can be measured (collected).

• Indicator that is not more complex than the concept it is trying to measure.

Metric

• Monetary:– Income.– Expenditure (“consumption”).

• Access to services/opportunities.

• Have been used, they reflect a reality that goes beyond its basic definition.

Metric: Options

• Once there is a unit of measure.

• Necessary to establish points of reference.

• Most utilized:– With monetary metric: Poverty Line.– In terms of access to services/opportunities:

Unsatisfied Basic Needs.

Parameters

• Each has its own characteristics.• Poverty Line:

– Contents of the goods basket:• Nutritional Level.• Patterns of consumption.• Other goods (health, education, housing).

• Unsatisfied Basic Needs:– Selection of needs.– Minimum levels.– Priorities.

Parameters

• Starting and basic issue.

• Quality of indicators/estimations is directly proportional to the quality of the basic information.

• Quality in terms of:– Opportunity.– Coverage.– Access.

• Sources:– Household surveys.– Census.

Inputs

Methodology• Methodologies have details that impact the

measures and that must be taken into consideration:– Poverty Line:

• Adult equivalent.• Economies of scale.• Regional differentials.• Use value of assets (house).

– Unsatisfied Basic Needs:• Selection.• Ranking.• Weighting.

– Each number has a story.

Methodology

• Decisions about methodology:– Use that will be given to the estimations.– Desired level of disaggregation.– Periodicity of estimations.– Availability of information.

• Measure not just to measure.

• Measure to characterize: poverty profiles.

• Measure to identify: causes, effects, etc.

• Ideally the methodology could be used to identify areas/sectors in need, program beneficiaries.

Usefulness

Thoughts

• Independently of the method used it is essential that the estimation process is:– Based on quality data.– Consistent (trends are important).– Transparent.– Replicable (access to data and methodology).– Easy to understand/communicate.– Useful in the decision making process.