Poverty Thresholds Analysis: Reassessing and Revalidating Quantitative Indicators Zulfiqar Ali 02 May 2011

Mean Values of and Household Distribution by Candidate Poverty Indicators IndicatorsBottom 10%Ex-poor (lpl)Mod-poor (upl)Non-poor Household size Female headed household Total cultivable land (acre) Homestead land (acre) Total operated land (acre) Livestock Poultry Bamboo Timber Total non-land asset value8,80511,50917,85331,119 Access to electricity Poor roof material (% of hhs) Access to sanitary toilet (% of hhs) HH head illiterate (% of hhs) HH head primary complete and above (%) Spouse illiterate (% of hhs) Spouse primary complete and above (%) HH head wage labourer (% of hhs)

Mean Values of and Household Distribution by Candidate Poverty Indicators (SHIREE/HIES/PRCPB) IndicatorsSHIREE (CMS1)HIES (Bottom 5%)HIES (Bottom 10%)PRCPB (Bottom 10%) Household size Female headed household Total cultivable land (acre) Homestead land (acre) Total operated land (acre) Livestock Poultry Bamboo Timber Total non-land asset value3446,6148,8052,457 Access to electricity Poor roof material (% of hhs) Access to sanitary toilet (% of hhs) HH head illiterate (% of hhs) HH head primary complete and above (%) Spouse illiterate (% of hhs) Spouse primary complete and above (%) HH head wage labourer (% of hhs)

Probit Model for the Extreme Poverty (Bottom 10%) Indicators IndicatorsCoefficientsSignificant Level Household size Female headed household Total cultivable land (acre) Livestock Poultry Bamboo Timber Total non-land asset value Access to electricity Poor roof material (% of hhs) Access to sanitary toilet (% of hhs) HH head illiterate (% of hhs) HH head primary complete and above (%) Spouse illiterate (% of hhs) Spouse primary complete and above (%) HH head wage labourer (% of hhs).28.00

OLS Regression for Per Capita Expenditure IndicatorsCoefficientsSignificant Level Household size Female headed household Total cultivable land (acre) Livestock Poultry Bamboo Timber Total non-land asset value Access to electricity Poor roof material (% of hhs) Access to sanitary toilet (% of hhs) HH head illiterate (% of hhs) HH head primary complete and above (%) Spouse illiterate (% of hhs) Spouse primary complete and above (%) HH head wage labourer (% of hhs)

Factor Scores in Principal Component Analysis (Component 1) Indicators Household size.13 Female headed household-.03 Total cultivable land (acre).29 Livestock.12 Poultry.11 Bamboo.19 Timber.20 Total non-land asset value.33 Access to electricity.24 Poor roof material (% of hhs)-.16 Access to sanitary toilet (% of hhs).27 HH head illiterate (% of hhs)-.37 HH head primary complete and above (%).38 Spouse illiterate (% of hhs)-.27 Spouse primary complete and above (%).31 HH head wage labourer (% of hhs).29

Comparison of Significance of Poverty Indicators by Different Models IndicatorsProbitOLSPCASig in All Household sizeYYYYYY Female headed householdYY- Total cultivable land (acre)YYYYYY Livestock-YY Poultry--Y Bamboo--Y TimberY-Y Total non-land asset valueYYYYYY Access to electricityYYYYYY Poor roof material (% of hhs)YY- Access to sanitary toilet (% of hhs)YYYYYY HH head illiterate (% of hhs)-Y- HH head primary complete and above (%) -YY Spouse illiterate (% of hhs)--- Spouse primary complete and above (%) --Y HH head wage labourer (% of hhs)Yy-YYY

Distribution of Households by Household Size and Poverty Status Household SizeSHIREEHIES Bottom 10%HIES Ex-poor (lpl)PRCPB (Bottom 10%) 1-2 members members or more members Total100.0

Distribution of Households by Cultivable Land and Poverty Status Land OwnershipSHIREEHIES Bottom 10%HIES Ex-poor (lpl)PRCPB (Bottom 10%) Absolutely landless (no land at all) Functionally landless (up to.50 acre) Marginal farmer ( acre) Small/medium/large farmer (over 1.00) Total100.0

Distribution of Households by Non-land Asset and Poverty Status Non-land Asset Holding (value in Taka) SHIREEBottom 10%HIES Ex-poor (lpl)PRCPB (Bottom 10%) No or very little asset holding (<8,806) Poor asset holding (8, ,000) Moderate asset holding (20,001-32,000) High asset holding (over 32,000) Total100.0

Distribution of Households by Access to Electricity and Poverty Status Households’ Access to Electricity SHIREEBottom 10%HIES Ex-poor (lpl)PRCPB (Bottom 10%) No Yes Total100.0

Distribution of Households by Access to Sanitary Toilet and Poverty Status Households’ Access to Sanitary Toilet SHIREEBottom 10%HIES Ex-poor (lpl)PRCPB (Bottom 10%) No Yes Total100.0

Distribution of Households by Employment Status of the HH Head and Poverty Status Employment Status of the HH Head SHIREEBottom 10%HIES Ex-poor (lpl)PRCPB (Bottom 10%) Wage labourer Others Total100.0

What do we get from the analyses presented above? THREE indicators may be taken into consideration in combination to identify the extreme-poor households as follows: - Land ownership (cultivable): Not more than.50 acre; - Total non-land asset: Not more than Taka 20,000; and - Employment status: At best wage laborer

Distribution of Households That Satisfy the Above Criteria Criteria % of Total Households (HIES 2005) Average monthly per capita expenditure Expenditure Taka/person/day Satisfy all three Satisfy at least two Satisfy at least one

Distribution of Households That Satisfy the Above Criteria (contd.) CriteriaBottom 10% (HIES 2005) Ex-poor (lpl) (HIES 2005) SHIREE (CMS1) Satisfy all three Satisfy at least two Satisfy at least one