Isla Margarita, Venezuela

1
High Level Meeting on Poverty, Equity and Social
InclusionII Plenary Session Challenges on the
Measurement of Poverty and Inequality Gaps

• Isla Margarita, Venezuela
• October 8-10, 2003

2
General Overview Measuring Poverty

• Definition
• Metrics
• Parameters
• Inputs
• Methodology
• Usefulness
• Final thoughts

3
Definition

• Multidimensional phenomena.
• Easy to recognize.
• Hard to define.
• Agreement that it is about insufficiency
• Income.
• Expenditure capacity (consumption).
• Opportunities.
• Access to services.

4
Metric

• 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.

5
Metric Options

• Monetary
• Income.
• Expenditure (consumption).
• Access to services/opportunities.
• Have been used, they reflect a reality that goes
  beyond its basic definition.

6
Parameters

• 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.

7
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.

8
Inputs

• 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.

9
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.

10
Methodology

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

11
Usefulness

• 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.

12
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.