Poverty lines. Michael Lokshin, DECRG-PO The World Bank. Problem:. Poverty rate in urban areas declined by 25% Poverty rate in rural areas declined by 25%. Overall poverty rate in the country declined by more than 50%. Solution:. Poverty lines. Michael Lokshin, DECRG-PO The World Bank.
Methods found in practice
Cost of food-energy requirement Food-share of “poor”
Food-energy intake method:
Expenditure or income at which food-energy requirements are met on average for each region/socio-economic group
FPL = CR*C
Table: Estimated caloric requirements for Georgia, 2003
"What income do you consider to be absolutely minimal, in that you could not make ends meet with any less?“
“Concerning your family’s food consumption over the past one month, which of the following is true?”
Less than adequate ...1
Just adequate .......…. 2
More than adequate.. .3
"Adequate" means no more nor less than what the respondent considers to be the minimum consumption needs of the family.
Subjective poverty lines could be derived from CAQ
Objective and CAQ subjective poverty rates by household size. Madagascar 2003 .
Comparison of actual and predicted subjective welfare
Defining "basic consumption needs"
Consistency in terms of welfare
Key question: how sensitive are the rankings in a poverty profile to these choices?