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7/27/2019 Poverty and Poverty Measurement Approach
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POVERTY AND POVERTY MEASUREMENT APPROACH
To effectively measure poverty it is obvious that they have to be identified and mapped. Poverty
mapping tackle the poor by identifying there situation. In Poverty mapping the major weakness
is that it process have no regard to individual or household in a community but rather the
community as a whole, hence there is a problem, also comparism between multiple areas are
completely absent. It can only be done in villages not in urban areas. The important strength it is
objective for community identification and is easy to use method.
Experts Measure poverty in different ways, although past perspectives shape present debates and
that economist, policy makers, activist and poor people have different stakes and opinion to the
concept hence measurement must also vary.
Meanwhile, Poverty analysis and measurement is a relatively new subject in the realm of public
statistics, or rather a renewed one, since it was a central concern in the earlier days of the
European statistical offices in England and other countries (Simon S. 1997). However, the issues
of poverty came to be treated in terms of income distribution and unemployment, and also as a
condition derived from personal handicaps, rather than as poverty as such. The assumption was
that in a well organized and modern economy everybody should have a stable employment and a
"satisfactory" income, and it was the task of statistical agencies to monitor deviations to this
general expectation, in order to prompt for the necessary corrective measures. (Simon S. 1997).
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Barely study on the subject of poverty started already in the 1950's with the severe problems of
famine afflicting large population groups in Asia and Africa, and studies showing the worldwide
problems of malnutrition and their long-term consequences. The relevance of poverty as an issue
increased with the perception that economic development was not being successful in many
countries, and, even when it was successful, it often left large groups at the margins, suffering
the impact of social, economic and political change on traditional patterns of social and
economic organization.
2.3.1 Income poverty
Aparajita B. (2008), uses Income to estimate poverty. However the use of income had varied
disadvantages which include, It is a derived variable which supposed to comprised of all
component and sources of Income, that it require accurately identified and accounting
framework is applied to estimate Income appropriately. The accounting structure should
disaggregate the items of cost and receipt in other to minimized chances of under or over
reporting. In the method household Income comprised of farm income and non farm income is
use as a basis for assessment of income poverty. For the income difference method the major
disadvantage it has not taking into consideration bitterness, division, exclusion, wealth, chance,
and location. Income was primarily use to set a minimum level called a poverty line in which any
income below that line was consider in poverty.
Paxson 1992), Deaton (1992) and Alderman, uses living Standard as an index, they measured it
using current consumer spending or current Income. However spending is generally preferred
since it is a measure of living standard, because current spending is a better indicator of current
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Income because current satisfaction is directly dependent on consumption but not Income. Also
current consumption is an indicator of long term average well being since it reveals information
about Incomes at other times past or future. But Income varies over time especially in agrarian
society which depend on weather and state of nature and using Income as a an indicator of well
being is questioned on the ground of in correct or failure to declare income correctly by
respondents Income is a secret issue that are not disclosed. But expenditure is not sensitive as
Income.
Therefore, it is common for farmers to fail to declare Income because of fear of tax, security
reasons and other government related tax policy, consequently exaggeration of poverty is
paramount under such situation. As such expenditure is often preferred. They too uses the
spending and Income to set a poverty line, below which an individual is considered poor.
Another biased method is assessed well being by Individual command over commodities. In this
method it divided line Between necessities and luxuries on minimum income. For commodities
base method of setting poverty line, in spite of its advantage in ease of incorporation into
questionnaire yet it is clouded with subjectivity. This is because it is common to have a
mismatch between estimated nutritional requirement of individual and actual consumption. It
also rules out the issue of economies of scales between household. Poverty depth generally, rely
from most of the previous methods on Income but Gerhard and others in their work criticized
the use of Income as being crude measure of poverty. To them Income comprised of tax and
family size were also another impediment to size of Income. Although their argument were
significant but can give a good measure, since it can be objectively measured if tax and family
size, depreciation and other forms of payment by the individual were taking into consideration.
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Even the Income of individual cannot as well serve because other forms of received by the
family are supposed to be accounted as Income. In this light it is pertinent to use Household
Income than personal income alone because if personal income alone were use certain household
have support from household members are not usually counted and considering the type of
culture prevalence where people within household assist in different capacity hence such
household are under reported.
2.3.2 Absolute Poverty
Poverty are measured on absolute sense: In this a minimum sets of resource persons need to
survive acute hunger, deprivation are said to constitute basic need which are converted into the
ingredients which enter in the minimum basket of essential goods and services regardless of their
definition into common denominator usually a monetary value. The absolute implies total or
cumulative. Serrano, M. and Raco, J. (2009) uses absolute or total expenditure level to classify
household poverty, the method disregard geographic characteristic of household under study. In
their method the absolute or total expenditure of all household were summed. Setting poverty
line, in this method the society was divided into two categories, The poor category and Non
poor category and called it a poverty line, margin or line is set for any total expenditure below it
were consider under poverty.
The absolute method is sometimes called the general poverty line which is usually defined by the
total cost of the required basket of goods needed to satisfy the basic consumer needs such as
food, clothing , housing , education ,health and other basic requirements. The weakness of this
method implies that it does not take care of seasonal, regional and cultural differences in
consumption pattern, difference between two household with different sizes cannot be possible
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and even within household of the same size the composition of the household members vary
hence their exist a variation on expenditure ascribed from such difference, geographical
characteristics which are vital are not put into view other variation are gender, age, season,
climate, food imbalances. Moreover, the definition of this minimum is not clear what are criteria
of setting the minimum? no measure to capture shelter, clothing, and transportation to place of
work or farm, others are variation based on satisfaction or utility by individual household
member are neglected. Later on, an updated version of the method incorporate the household
size, in this method ratio of total expenditure level and house hold size were used to provide a
head count measure. The weakness of the head count measure is the disregard to composition of
household members since differences occur when a household has many children below the 18
or when a household has more elderly that are above 65 years. Such a household will invariably
have different absolute expenditure. Another weakness is measurement of social equality,
association, difference in location and living condition, opportunity are all ignored.
Another way to assess household well being is to assess in changes in household expenditure
pattern including changes in proportion of total expenditure that household uses for food, a drop
in proportion of food expenditure is associated with improvement in level of household well
being. Assets ownership and ownership of specific consumer durable and improvement inhousing conditions are also an indication of household well being . So poverty line is in thiswhen the changes were below set target.
2.3.3 Relative Poverty
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Another approach to poverty measurement is the use of relative poverty approach.Relative
poverty, which is a measurement of the resources and living conditions of parts of the population
in relation to others are the two major ways of assess poverty, relative implies In Relation to
other people level. Measure the segment of population that are poor relative to the set Income of
the general population. Line is set at of the mean Income or 40th
percentile of the distribution
or average Income of 40% of Population. The number of population whose incomes is less than
predetermine percentage of mean Income of 50% or less of the mean Income are class to be
poor. Relative method uses resource and living condition of part of population in relation to
others are considered and classify some as poor and some as not poor. In the method Individual
are considered poor when their Income or expenditure is less than the basic needs poverty line
set for the group or class within the population usually (Calculated on consumption per adult
equivalent per 28days).this also is not appropriate since it measures inequalities which exist in
any society.