Estimating the Poverty Line and Living Conditions of Rural Households: A Case Study

Abstract

Poverty has always been studied in a world of certainty. However, if the aim of studying poverty is not only improving the well-being of households who are currently poor, but also preventing people from becoming poor in the future, a new forward looking perspective must be adopted. For thinking about appropriate forward-looking anti-poverty interventions (i.e. interventions that aim to prevent or reduce future poverty rather than alleviate current poverty), the critical need then is to go beyond a cataloging of who is currently poor and who is not, to an assessment of households’ vulnerability to poverty. In this paper, the cost and income of rural households in Khuzestan province have been reviewed and analyzed. Subjective poverty line in terms of behavioral observation were estimated by estimating linear expenditure system (LES) based utility function Stone - Gray and using household budget data (1991-2003) for rural area in Khuzestan province. The product portfolio that were estimated for the minimum wage (poverty line) including food, clothing, housing and health. According to the estimates, the minimum required expenditure for a rural household in Khuzestan province with average household size 9/6 persons in 1991 to 339,182 Rls, and in 1996 was 21,407,484 Rls that in 2009 was equivalent to 4,415,051 Rls.