1. Xavier Mancero Statistics Division, ECLAC Seminar on poverty measurement Geneva, 5-6 May 2015

2. Background ECLAC regularly measures poverty in Latin America. Poverty lines are currently being updated. Based on “cost of basic needs” method. Determine caloric requirement (R) Select reference population Build a Basic Food Basket and calculate cost per calorie (C) Extreme poverty line: EPL = R x C Determine ratio of total expenditure to food expenditure (Orshansky coefficient, O) Poverty line: PL x O The method requires estimating caloric intake: Data from most recent income and expenditure surveys for 18 countries. Converting expenditure to quantities (when necessary) and quantities to their nutritional equivalent

3. Evidence on caloric intake Three comparisons: Comparison to FAO Food Balance Sheets Intake vs caloric requirement by income groups Distribution of households by intake vs caloric requirement Surveys vary greatly in their ability to capture household caloric intake. Caloric intake varies from being possibly overestimated to clearly underestimated. Measurement at household level is not representative of consumption patterns for a considerable part of the sample.

4. Figure 1 Energy intake estimated from surveys and from balance sheets (Daily Kcal. per capita)

5. Figure 2 Average caloric adequacy ratio by “mobile quintile”

6. Figure 3 Population with caloric adequacy ratio below 0.5 and undernourishment

7. Possible effects on poverty lines Identification of the reference group Available methods depend directly on caloric intake Method used by ECLAC in the 90s  see figure 2 Iterative method: Difference between average expenditure and poverty line depends on difference between caloric intake and caloric requirement PL = R x C x O Mean expenditure = Intake x C x O Cost per calorie To what extent the over/underestimation in caloric intake affects the structure of expenditure? Orshansky coefficient To what extent the over/underestimation of food expenditure affects the share of food to total expenditure? More research is needed on the quality of I&E surveys and their comparability