Consumption Poverty Research Articles

Rural Livelihood Strategies in Cambodia: Evidence from a Household Survey in Stung Treng

The overall objective of this discussion paper is to advance the knowledge on rural livelihoods in Stung Treng, Cambodia. In a cluster analysis, five clusters with very different livelihood strategies are identified based on a sample of 600 rural households. Despite the fact that nearly all households are engaged in some form of subsistence farming, especially by growing rice, the richer clusters build on self-employment and higher-skilled wage employment. In contrast the middle income cluster mainly depends on natural resources (fish and firewood). The poorer two clusters are engaged in lower-skilled wage employment. The incidence of poverty is widespread but differences between the clusters are clearly visible. Even the better-off households have consumption poverty headcount ratios of between 37 to 50% at PPP $1.25. For households from the poorest clusters the poverty headcount ratio amounts to even 70% for income and 80% for consumption. Especially the households largely depending on natural resource extraction are characterized by a high incidence of poverty and high vulnerability. In addition, there are a number of pressures which are expected to increase poverty problems in the future. Policies aimed at reducing poverty and improving rural livelihoods need to carefully consider the close linkages between rural livelihoods and natural resources. But also a diversification away from natural resource extraction into higher-skilled jobs is found to be a strategy opening up new opportunities to improve livelihood security and raise the living standards of the poor.

Examining A ‘Micro–Macro Paradox’: Did Poverty Really Fall in the Union of Myanmar?

AbstractThere is a ‘micro–macro paradox’ in poverty measurement. In a number of countries, declines in income or consumption poverty found in nationally representative household survey data are at odds with people's perceptions of worsening poverty or deprivation. This article suggests a number of potential explanations for the paradox and presents the case of Myanmar where many of these same issues have recently played out. It is argued that there are plausible explanations that reconcile, in part, apparently conflicting positions in Myanmar's ‘Great Poverty Debate’. Copyright © 2015 John Wiley & Sons, Ltd.

Synergies Among Monetary, Multidimensional and Subjective Poverty: Evidence from Nepal

In this paper we construct a Nepal specific multidimensional poverty index using the Nepal Longitudinal Sample Survey (NLSS) for the period 1995–2010. The indicators for Nepal Multidimensional Poverty Index (NMP) have been chosen using the goals set by the Government of Nepal and the perceptions of adequacy as reported by households. In doing so this study combines multidimensional and subjective methods of measuring wellbeing. The subjective data is used to guide the choice of dimensions for the multidimensional analysis. Our findings show that Nepal has had a dramatic fall in multidimensional poverty along with the observed fall in consumption poverty in this period. Comparing the extent to which consumption poverty accurately identifies the multidimensionally poor, we find the error has reduced over time but remains large in proportion to the poverty rate implying the need for a multidimensional measure. For the different ethnic groups and regions the patterns of reduction in poverty are not homogenous and are different from those of consumption poverty with the NMP outperforming the consumption poverty in tracking targeted policy actions.

Konsummuster und Konsumarmut von SGB-II-Leistungsempfängern. Eine Untersuchung auf Basis der Einkommens- und Verbrauchsstichprobe

Abstract Despite the importance of consumption patterns for setting benefit levels, up until now, knowledge on consumption of those receiving unemployment benefit II, the means-tested basic security payment in Germany, is rather restricted. To close this gap, we analyze the amount and structure of benefit recipients’ consumption spending as well as consumption poverty. We can show that those unable to draw on resources besides benefit payments have to restrict their private consumption and face a higher risk of being consumption-poor. One advantage of using consumption data is the fact that by doing so one is able to identify the domains in which material restrictions have the strongest effect. What we can see from our analyses is that restrictions are rather moderate for goods covering basic needs, like food, clothes, or accommodation. In return, they are much more significant in the domain of social and cultural participation. The reason for this appears to be that recipients concentrate their resources...

Household Expenditure Patterns, Equivalence Scales, and Poverty in Belarus

:This study estimates the equivalence scale for Belarus, while directly accounting for household size economies of scale. The poverty levels for vulnerable social groups are estimated using the households’ equivalized total expenditures. The change in poverty between 2006 and 2010 is evaluated. In addition, the comparison of Engel curves for several expenditure categories is conducted for this time period.

Book Reviews

David I. Levine of University of California, Berkeley reviews “Paying Out-of-Pocket for Drugs, Diagnostics and Medical Services: A Study of Households in Three Indian States”, by Moneer Alam. The Econlit abstract of this book begins: “Examines the out-of-pocket health care expenses of low-income households in the Indian states of Uttar Pradesh, Rajasthan, and Delhi. Discusses population size and composition of sample households; socioeconomic variations, consumption poverty, and health-generated inequalities in the sample population; self-reported ailments and hospitalization—differentials in utilization of health care; catastrophic spending on health by sample households—some results; decomposing out-of-pocket health spending—share of drugs, medical services, and other components; utilization of public health facilities—a situational assessment; and policy directions. Alam is Professor of Economics and Head of the Population Research Centre with the Institute of Economic Growth, Delhi.”

Recent Trends in U.S. Income and Expenditure Poverty

AbstractAfter many years of following similar trends, U.S. poverty rates measured by household spending in data from the U.S. Consumer Expenditure Survey (CE) fell between 2000 and 2008, while poverty measured by income rose. Comparisons of spending and income poverty in the CE with income poverty in other surveys, spending data from the Panel Study of Income Dynamics, and a time series of employment levels, find the CE to be the outlier. The findings do not bear directly on the primary use of CE data in providing category weights for calculation of the Consumer Price Index, but do require explanation not available in CE public‐use files.

AGRICULTURAL SECTOR TRANSFORMATION IN SELECTED COUNTRIES OF SOUTH EASTERN EUROPE

Governing the process of economic transformation is one of the most prominent issues arising since the fall of the Iron Curtain. After the successful transition model of the Central and Eastern European countries and their EU accession, the main anchors of the EU enlargement are directed into the South Eastern part of the continent. Most obviously, the EU enlargement is entering into the new phase of its expansion. In this paper we evaluate the state of transformation in the agricultural sector of the potential EU members comprising countries constituting the South Eastern Europe (the Western Balkans), and Turkey. We analyze whether the significant transitional changes occurred in the agricultural sector in observed countries. The main areas of our interest involve the comparative analysis of the state of economic transformation and the income convergence, the economic importance of agriculture in the potential EU Members, impact of economic transformation on the agricultural assets, agricultural policy implications, investigation of consumption patterns and poverty prevalence.

Dominant Patterns of Expenditure Among Older People in the United Kingdom: Segmenting the Older Consumer Using the Living Costs and Food Survey

Policy-makers and practitioners need a good understanding of older people’s expenditure and consumption to inform the design of policies and services that affect their lives. This paper uses data from the 2010 Living Costs and Food Survey to examine and explain levels and patterns of expenditure among households headed by someone aged 50 and over. Expenditure is defined based on 12 broad categories, which reflect the international standard ‘Classification of Individual Consumption according to Purpose’, and is equivalised to control for household size. We report the results of cluster analysis which segments older households depending on their predominant patterns of expenditure. CHAID (decision tree) analysis and bivariate analysis is then used to understand the profile of each cluster in relation to their demographic, socio-economic and other characteristics. Based on their patterns of expenditure, six distinct clusters of older households emerge from the analysis. The findings raise important questions for government policy in the UK in relation to the extent and nature of expenditure poverty among older consumers.

The impact of natural disasters on household income, expenditure, poverty and inequality: evidence from Vietnam

Natural disasters are expected exacerbate poverty and inequality, but little evidence exists to support the impact at household level. This article examines the effect of natural disasters on household income, expenditure, poverty and inequality using the Vietnam Household Living Standard Survey in 2008. The effects of a natural disaster on household income and expenditure, corrected for fixed effects and potential endogeneity bias, are estimated at 6.9% and 7.1% declines in Vietnamese household per capita income and expenditure, respectively. Natural disasters demonstrably worsen expenditure poverty and inequality in Vietnam, and thus should be considered as a factor in designing poverty alleviation policies.

Ex Ante Inequality and Under-Nutrition Vulnerability Dynamics: Case Study of the Sundarbans Delta Region, West Bengal, India

In this paper ex ante inequality measure is used to estimate inequality in childhood chronic under-nutrition among different vulnerable subgroups. Ex ante inequality in nutritional achievement is determined by estimating Concentration Index by ranking the sample population as per different contextual absolute and predicted vulnerabilities. Such vulnerabilities include climatic shock induced asset loss, livelihood insecurity, physical accessibility and consumption sacrifice after treatment seeking of children for under-nutrition related morbidities and perception of care givers regarding quality and effectiveness of care provided by unqualified providers. Results found that vulnerability to consumption poverty aggravated chronic under-nutrition among less vulnerable groups mainly among those who perceived that unqualified providers provided quality service and were very effective during crisis. Whereas, vulnerability to investment poverty due to asset loss aggravates chronic under-nutrition among more vulnerable groups as their low economic resilience against any safety net results in no treatment seeking but rely on home remedies to cure the child. Though due to good social cohesion, traditional knowledge and beliefs for treatment are shared among each other but this is not sufficient to break the under-nutrition morbidity vicious circle, especially when the under-nutrition is chronic in nature. So the paper finally suggests several policy suggestions for different vulnerable segments.

Time Deficits and Poverty: The Levy Institute Measure of Time and Consumption Poverty for Turkey

This study presents a new methodology for a two-dimesional poverty measure for Turkey taking into account necessary consumption as well as the required household production neded to achieve a minium living standard. Official poverty lines in Turkey and other countries ignore the fact that unpaid household production contributes to the fulfillment of material needs and wants that are essential to attaining a minimum standard of living. Standard measurements of poverty assume that all households and individuals have enough to adequately attend to the needs of household members, yet, some households may not have sufficient time, and they thus experience time deficits. If a household experiencing a deficit cannot afford to cover it by buying market substitutes (e.g., hiring a care provider), that household will encounter hardships not reflected in the official poverty measures.

The Poverty in India-An Over View

India is a country of continental proportions, and poverty is a multidimensional phenomenon. Not surprisingly, the debate over poverty in India—its extent, trends, causes, and cure—is complex and controversial. Fortunately, India also has a much higher quality and more sub-stantial evidence base than most other countries for understanding poverty. Questions of poverty in India have engaged a large com-munity of researchers over the years. But in recent decades, because difficult measurement issues have arisen, a disproportionate amount of attention has been devoted to assessments of the extent of poverty and the rate of poverty decline. Much less is known about how the rapidly changing economic landscape has altered the underlying profile of poverty—and how that affects the consequent search for its causes and cure. Fundamentally, the concept of poverty is associated with socially perceived deprivation with respect to basic human needs. As a result, social perceptions are taken to play a dominant role in ascertaining deprivation although self -perceptions cannot be ignored altogether and aggregated individual preferences may have to be respected in satisfying any given need in most cases as weargue below in the context of consumption poverty. These basic human needs are usually listed in the material dimension as the need to be adequately nourished, the need to be decently clothed, the need to be reasonably sheltered, the need to escape avoidable diseases, the need to be (at least) minimally educated and the need to be mobile for purposes of social interaction and participation in economic activity.

The Persistence of Subjective Poverty in Urban Ethiopia

Using panel data spanning 15 years, this paper investigates the persistence and correlates of subjective and consumption poverty in urban Ethiopia. Despite the decline in consumption poverty in recent years, which has been linked to rapid economic growth, subjective poverty has remained largely unchanged. Dynamic probit regression results show that households with a history of past poverty continue to perceive themselves as poor even if their material consumption improves. Our results also suggest that the relative economic position of households is a strong determinant of subjective poverty, and having at least some type of employment reduces the likelihood that households will perceive themselves as poor, even if they remain in objective poverty. Receiving remittances from abroad, on the other hand, does not reduce perceived poverty, even if it raises material consumption. We argue that any analysis to measure the impact of growth on welfare should encompass subjective measures as well.

Poverty: Where Do We Draw the Line?

This paper is the latest in a series of studies on the measurement of poverty in Canada. It provides new estimates of poverty in Canada using the Basic Needs Line. It determines the trend in poverty over the past 40 years, and provides a fairly detailed profile of the poor. In 1969, Canada’s overall income poverty rate was about 16 percent. By 2009, the latest year for which detailed income and consumption data are available, the rate was below 5 percent. The trend for child poverty is about the same, with child poverty at about 5.5 percent in 2009 — down from about 17 percent in 1969. The corresponding rates for consumption poverty are even lower. The risk of poverty is greater among the young, single persons, and single parents, and among persons with disabilities. Perhaps most strikingly, while only 29 percent of all Canadians are renters, fully 83 percent of poor Canadians live in rented accommodation. The paper is much more than an update of the estimates of basic needs poverty. It looks more carefully at the debate about absolute and relative measures. It examines more critically, and in far more depth, the media treatment of the poverty issue. The paper highlights a number of concerns about the media coverage of poverty. Among them are the tendency to “switch” definitions (to use relative definitions to measure poverty, and then to use absolute definitions to describe those so measured), the tendency to ignore some clearly important government commitments (like the declaration at Copenhagen in 1995 that Canada signed onto, which mandated that all nations both measure and end absolute poverty), the tendency to promote other stories criticizing the government for failing to end relative poverty, and the virtual absence of any investigative reporting on this topic.

Imputing rent in consumption measures, with an application to consumption poverty in Canada, 1997–2009

AbstractWe consider two econometric problems in the measurement of poverty, both relating to rent imputation. First, we account for quality differences correlated with selection into owner‐occupied versus rental tenure. This correction increases estimated household consumption by 5% over uncorrected estimates and decreases estimated poverty rates quite dramatically. Second, we propose that measurement error induced by the imputation be corrected by imputing a consumption distribution, rather than a consumption level, for each household. This correction increases estimated poverty rates slightly. We use our methods to measure consumption poverty in Canada, and find that the imputation strategy used influences the patterns observed. For example, measured poverty among the elderly barely declines when one uses our methods, in contrast to the almost 6 percentage point reduction we find using traditional methods. In our assessment of the over‐time evolution of consumption poverty, we find that substantial progress has been made on overall poverty and on child poverty, but that poverty among the elderly hardly changed.

Estimation of Prevalence of Food Insecurity in Sri Lanka

Information on populations that are food insecure at national and regional level, and changes in food security over time, are important in formulating policy and development interventions for food security. Sri Lankas’s food security assessments have been based on composite indices constructed using variables that are direct or indirect determinants of food security. Such composite indices help compare relative food insecurity across geographic areas, and over time, but limit the assessment of the magnitude of the prevalence food insecurity. In this study using deprivation of food energy intake as an indicator of food insecurity, prevalence of food insecurity is measured as the food insecure proportion of populations in specific geographic areas at specific points in time. The probability density function of per capita food dietary energy intake is assumed to follow a lognormal distribution and prevalence of food insecurity is estimated as the proportion of the population whose per capita dietary energy intake per day is unsatisfied in relation to a recommended minimum level. The method was applied to primary data from the National Household Income and Expenditure Surveys conducted in the years 2006-2007 and 2009-2010. The derived food insecurity estimates were validated comparing with official estimates of expenditure poverty, nutritional outcomes and also with the findings from food security assessments based on composite indices, available in the literature. The analysis of prevalence estimates reveal insights on regional differences in food insecurity and changes over time, yielding important implications for policy. DOI: http://dx.doi.org/10.4038/sljastats.v14i1.5875

Dynamics and Drivers of Consumption and Multidimensional Poverty: Evidence from Rural Ethiopia

This study aims to explore poverty measures, its dynamics and determinants using Multidimensional Poverty Index (MPI) and consumption poverty. Our results show that the two measures assign similar poverty status to about 52 percent of households and that both approaches confirm poverty is mainly transient in rural Ethiopia. However, we find that the trend in adjusted head count poverty is different when using these two poverty measures.In terms of determinants of poverty dynamics, we find that household size matters in consumption poverty while we do not find significant effects on multidimensional poverty. Amongst the shocks, drought shock is found to affect consumption poverty but not multidimensional poverty. This implies that short-term shocks are more reflected in consumption poverty while the effect of simultaneous shocks is exhibited significantly on multidimensional poverty. Overall, our result provides empirical evidence on the importance of using both measures as complementary to get a full picture of poverty measure, dynamics and determinants.

Dynamics and Drivers of Consumption and Multidimensional Poverty: Evidence from Rural Ethiopia

This study aims to explore poverty measures, its dynamics and determinants using Multidimensional Poverty Index (MPI) and consumption poverty. Our results show that the two measures assign similar poverty status to about 52 percent of households and that both approaches confirm poverty is mainly transient in rural Ethiopia. However, we find that the trend in adjusted head count poverty is different when using these two poverty measures. In terms of determinants of poverty dynamics, we find that household size matters in consumption poverty while we do not find significant effects on multidimensional poverty. Amongst the shocks, drought shock is found to affect consumption poverty but not multidimensional poverty. This implies that short-term shocks are more reflected in consumption poverty while the effect of simultaneous shocks is exhibited significantly on multidimensional poverty. Overall, our result provides empirical evidence on the importance of using both measures as complementary to get a full picture of poverty measure, dynamics and determinants.

Quality of Statistical Match and Simulations Used in the Estimation of the Levy Institute Measure of Time and Consumption Poverty (LIMTCP) for Turkey in 2006

The quality of match of the statistical match used in the Levy Institute Measure of Time and Consumption Poverty (LIMTCP) estimates for Turkey in 2006 is described. The match combines the 2006 Zaman Kullanim Anketi (ZKA 2006) with the 2006 Hanehalki Butce Anketi (HBA 2006). These are the national time-use survey and household income and expenditure surveys, respectively. The alignment of the two datasets is examined, after which various aspects of the match quality are detailed. The match is of high quality, given the nature of the source datasets.The quality of the simulation of employment gains for Turkey in 2006 is then described. All eligible adults not working for pay, as employers, or as unpaid household workers were assigned jobs. In all households that included job recipients, the time spent on household production was imputed for everyone included in the time-use survey. Household consumption was then assigned to each household in the simulation containing a job recipient. The recipient group was compared to the donor group, both in terms of demographic similarity and in terms of the imputed usual hours, earnings, and household production generated in the simulation. In both cases, the simulations were of reasonable quality, given the nature of the challenges in assessing their quality.