DVM 2106 Lecture Notes - Lecture 11: Extreme Poverty, Northern Canada, Lead
21 Jun 2018
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LECTURE 11: Measuring and evaluating poverty (Lauchlan Munro)
What is poverty?
- Gets passed on to next generations; impedes people’s ability to live a full and completely life
- Obstacle to overcome other development issues
- Lack of resources; living below a poverty line; lack of opportunity; not being able to meet basic
needs
- Poverty is a threat to your ability to realize your full potential
Income poverty
- Concerned with the ability of a household/individual to produce or purchase or otherwise
acquire basic needs (food, clothing, shelter, medications, school fees)
- Income poverty is about “command over commodities” (Sen) – commodities are food, water,
clothing and shelter
- Example: proportion of people living under $1.50/day
Calculating!
- How to calculate individual/household command over commodities?
- First, define a basket of basic needs (food, clothing, shelter)
- Second, find out how much each item costs
- Third, add up cost of all items in that basket of goods costs per month… amount of money is
called poverty line
- Third, you conduct a household survey to see how much money people earn
- Fourth, you can calculate how many people earn below the poverty line!
- Average is misleading: higher-income people are pushing it up (doesn’t represent Northern
Canada for example)
Household surveys
- No need to survey entire population… representative sample (at least 1000 households)
- Two ways: direct and indirect
- Direct: ask people how much they earn… people lie, so not reliable
- Indirect: ask how much they spend on each item or get them to keep a consumption diary
Ask them how much they save
Add it all up: that is their income
More accurate results
find more resources at oneclass.com
find more resources at oneclass.com
Head Count Ratio of Poverty)
- H = (Pb / N) x 100
- H is head count ratio of poverty (proportion of people living under poverty line)
- Pb is number of people earning less than the poverty line in your sample
- N is number of people in sample
Extreme poverty vs. poverty
- You can have two poverty lines, one for all basic needs (i.e. “the poor”) and one for food items
alone (i.e. “the extremely poor” or “very poor”)
- Second group is so poor that they cannot afford to eat
Advantages of income poverty as a measure of poverty
- Lack of income is a real problem. Material destitution causes physical and psychological pain
Household surveys are quite accurate
- Data can be collected at different times to see trends in poverty over time
- We can eliminate absolute poverty
- Absolute poverty has been going down (mainly in Asia… China, Indonesia)
- Economic growth helps alleviate poverty in some parts (such as China vs. India)
- Poverty is increasing in some countries (Zimbabwe)
Disadvantages of income poverty as a measure of poverty
- Household surveys sometimes do not capture either the very rich or the very poor
- What goes on inside the household? Who in the household gets that income? Who gets
more/less food? Not a good unit of analysis
Often, men eat first, then boys, then women and girls
Women tend to spend more on necessities and men on luxuries (booze, tobacco)
So, absolute poverty is the inability to afford a basket of basic goods.
Relative poverty
- Condition in which people lack the minimum account of income needed in order to maintain the
average standard of living in the society in which they live. Relative poverty is considered the
easiest way to measure the level of poverty in an individual country
Relative poverty measures
- Many measures… they all measure poverty in relation to other people in same society/country
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Lecture 11: measuring and evaluating poverty (lauchlan munro) Gets passed on to next generations; impedes people"s ability to live a full and completely life. Lack of resources; living below a poverty line; lack of opportunity; not being able to meet basic needs. Poverty is a threat to your ability to realize your full potential. Concerned with the ability of a household/individual to produce or purchase or otherwise acquire basic needs (food, clothing, shelter, medications, school fees) Income poverty is about command over commodities (sen) commodities are food, water, clothing and shelter. First, define a basket of basic needs (food, clothing, shelter) Second, find out how much each item costs. Third, add up cost of all items in that basket of goods costs per month amount of money is called poverty line. Third, you conduct a household survey to see how much money people earn. Fourth, you can calculate how many people earn below the poverty line!
