Measuring Consumption and Poverty in Zambia GSS methodology conference, 27 June 2012

Presentation summary Why a poverty trend needed to be developed retrospectively in Zambia LCMS 2010 fieldwork delays lead to problems Adjustments to 2010 data to ensure comparability Political environment – Lessons?

Zambia consumption surveys Living Conditions Monitoring Surveys (LCMS) 1996, 1998, 2004, 2006 Conducted over 2 – 4 months Consumption data collected in a one time HH interview LCMS 2002/3 Longitudinal survey Diary method In field for months

Zambia consumption surveys Differences in survey design: Questionnaires Sample size and selection Dates for data collection Differences in analysis methods Poverty lines Consumption aggregate Thus no comparable trend available

Questionnaire differences Differences in lists of food items (e.g. ‘other vegetables’, poultry) Significant differences in maize and maize products Use of different recall periods (2 weeks, 4 weeks, 1 month, 12 months)

Questionnaire differences Some surveys included quantities and values of own production, allowing prices to be generated. Others had seperate community price questionnaires

Differences in sample size and sample selection Sample selection of SEAs based on 2000 census sample frame - consistent over surveys Sample size varies from 6,000 to 20,000 households Sample of households per strata within SEAs selected by supervisors or enumerators

Zambia poverty lines Zambia poverty lines food poverty lineoverall poverty line ,18128, ,86147, ,223111, ,71093,872 Decline in the poverty line btw 2004 and 2006 shows that the methodology of updating the poverty line changed over time. (CPI Food inflation = 20%)

Developing methodology to establish the poverty trend, retrospectively Reviewed questionnaires and available data for 1996, 1998, 2004 and 2006 Developed a new method that could be applied to data New food basket based on consumption shares on each food item for HHs in 5 th and 6 th deciles (2006)

Developing methodology to establish the poverty trend, retrospectively Valued food basket for each year using item specific CPI indices (avoiding differences in CPI structure over time) Derived overall poverty line based on non food share of HHs in 5 th and 6 th deciles Developed a consistent consumption aggregate based on best practice and available data across surveys

Comparison of overall poverty lines ('000 Kwacha),

New Poverty trend – Zambia

LCMS 2010

CSO required that the LCMS 2010 serve two purposes: 1. To monitor poverty trends 2006 – Develop separate urban and rural poverty lines. Lessons learned from previous surveys - Questionnaire had more specific consumption items listed

LCMS 2010: Continuing poverty trend Developed a ‘Narrow’ consumption aggregate, strictly excluding all items NOT in the 2006 LCMS Included items likely to be under ‘other’ categories in 2006

LCMS 2010 ‘Other’ categories excluded Own production/’receipt from other sources’ of other vegetables, fruits and own poultry these were ‘accidentally’ crossed out in 2004 and 2006 questionnaires ‘Narrow’ consumption aggregate therefore excludes these items

LCMS 2010: A key difference Problem: LCMS field work was delayed by 2 months Rainy season (access) Lean season 2010 data showed a large increase in poverty when trends (2009) methodology applied

Attempts to deal with ensuring comparability in analysis Adjustment (i): Use Dec./Nov prices to evaluate the food poverty line Argument: Fieldwork was 2 months later than the 2006 survey period, Prices in the period January to March were slightly higher than Nov-Dec.

Adjustments to deal with comparability in analysis Adjustment (ii): Reduce the food share of the overall poverty line Argument: Households have a lower non-food consumption in the period January to April (lean period) than from Nov. to Dec. LCMS 2002/03 show that the non-food share in the period Jan. to April is indeed lower than in the period Nov.-Dec. The non-food share of the total poverty line in 2010 was lowered by 3 percentage points, from 41.5% to 38.5% (was reviewed with 1.5% and 3% reductions) However the LCMS 2002/03 report shows lower poverty in Q1

Adjustments to deal with comparability in analysis Adjustment (iii) Take out the price increase for imported rice from the pricing of the poverty line Argument: Between 2006 and 2010 the national median price for local rice increased roughly by the factor 2.14, for imported rice by the factor 4.17.

Adjustments to deal with comparability in analysis Adjustment (iv): Use an extended consumption aggregate Consultants requested to create an ‘extended’ consumption aggregate, to include own-produced and items received of other vegetables, fruits and poultry Comparing item specific budget shares over time reveals that own produced ‘other vegetables’ are extremely important consumption items.

Adjustments to deal with comparability Adj. (iv) – extended cons. agg. Share (of total consumption) of other vegetables was 1.7% in 2006 and 2% in 2010 – under the narrow consumption aggregate (inc. only purchases) Share of ‘other vegetables’ in ‘extended’ consumption aggregate (2010) is 11% This indicates that the narrow 2010 consumption aggregate is actually more comparable to the 2006 aggregate.

Adjustment (iv): outcome When ‘Extended’ aggregate is used to generate poverty headcount, results …………………… Poorer quintiles gained against the overall trend of a decline in real consumption (own produced vegetables, fruits and poultry are of much greater relevance to poorer quintiles) Significant discomfort with this adjustment

Further revisions made by CSO Spatial price differences removed Remittances sent added to HH consumption aggregate Consumption aggregate for 2010 includes all food items (e.g. ‘other own production’)

Effects of adjustments on poverty headcount Changes in poverty line methodologyPoverty LinesHeadcount Estimates Prices used Imported Products Food share Food Poverty Line (K) Overall Poverty Line (K) Base Consumption Aggregate Extended Cons. Aggregate Base scenario poverty line Jan-March 2010 local and imported rice Constant (58.5%) 103,611177, %67.2% Combinations of changes Nov-Dec 2009 local rice only Constant (58.5%) 98,505168, %65.5% Nov-Dec 2009 local rice only Ad-hoc (60% = +1.5%) 98,505164, %64.3% Nov-Dec 2009 local rice only Ad-hoc update (61.5% = +3%) 98,505160, %62.8% Final method: All food consumed and remittances sent inc. in consumption agg. provincial price deflator removed 96,366146, %

Political situation CSO senior management change half way through survey (temporary promotion) GRZ preparing for election and CSO under pressure to show reduction in poverty Clear steer for ST that poverty must have fallen (argument anecdotal) President announces fall in poverty before final numbers agreed

Lesson learning Survey had on-going evaluation – Paper available Summary of lessons learned in brief paper Political lessons Management lessons Technical lessons

Thank you!