Poverty Monitoring Group (PMG) Meeting December 4, 2013 An Introduction to the HBS 2011/12 Poverty Estimates Isis Gaddis, World Bank

Introduction On Nov 14 the NBS released the poverty estimates for the 2011/12 Household Budget Survey (HBS) – Show a national poverty headcount (for mainland Tanzania) of 28.2% (in 2011/12) A few days later NBS released the Key Findings report The 2011/12 poverty estimates are not comparable to 2007 due to improvements in... – the survey instrument – the poverty estimation methodology NBS (jointly with the WB and consultants) is currently re-analyzing the 2007 HBS data to assess the trend in poverty since 2007 (results expected for early 2014)

Poverty Estimates of the 2011/12 HBS Poverty headcounts (%) based on the 2011/12 HBS Poverty line = (basic needs poverty)Poverty line = (food poverty) Urban15.5Urban6.0 Rural33.3Rural11.3 Regions Urban21.7Urban8.7 Rural33.3Rural11.3 Dar-es-salaam4.1Dar-es-salaam1.0 Total28.2Total9.7

2011/12 Poverty Lines Food poverty line (Tsh 26,085.5 per adult per month) – Based on the cost of a food basket that delivers 2,200 calories per adult per day – Cost are estimated at the food consumption patterns prevailing in a reference population (2 nd to 5 th decile of the distribution of total consumption per adult equivalent) – Calorie norm is within the range of what neighboring countries are using (e.g. Ethiopia 2,200 kcal per adult, Kenya 2,250 kcal per adult, Rwanda 2,500 kcal per adult, Uganda 3,000 kcal per adult)

2011/12 Poverty Lines (cont’d) Basic needs poverty line (Tsh 36,482 per adult per month) – Adds an allowance for basic non-food requirements to the food poverty line – The non-food component is based on the average non- food consumption of households whose total consumption is close to the food poverty line (71.5%) – Scaling up the food poverty line by this ratio delivers the basic needs poverty line – Variant of the so-called ‘lower bound approach’ of the cost of basic needs methodology (used by several countries in the region)

2011/12 Poverty Lines (cont’d) The 2011/12 basic needs poverty line (Tsh. 36,482) translates (roughly) into $1.36 per adult per day at 2005 purchasing power parities (PPP) This is effectively slightly below the international $1.25 a day poverty line because the latter is expressed per capita The gap between the Tanzania national poverty line and the international poverty line has declined – In 2007, the basic needs poverty line was estimated at Tsh. 13,998 per adult per 28 days – The increase is partly an effect of the improved survey instrument – Underscores the need for further analysis before drawing conclusions about the poverty trend