Isla Margarita, Venezuela October 8-10, 2003 High Level Meeting on Poverty, Equity and Social Inclusion II Plenary Session: Challenges on the Measurement of Poverty and Inequality Gaps

Definition Metrics Parameters Inputs Methodology Usefulness Final thoughts General Overview: Measuring Poverty

Multidimensional phenomena. “Easy” to recognize. Hard to define. Agreement that it is about insufficiency: –Income. –Expenditure capacity (“consumption”). –Opportunities. –Access to services. Definition

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. Metric

Monetary: –Income. –Expenditure (“consumption”). Access to services/opportunities. Have been used, they reflect a reality that goes beyond its basic definition. Metric: Options

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. 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. Parameters

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. Inputs

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.

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

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. Usefulness

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.