Results of the survey on methods of poverty measurement in official statistics in the UNECE region – general reviewSEMINAR ON POVERTY MEASUREMENT

GENEVA, MAY 2015

Anna Bieńkuńska Task Force on Poverty Measurement, CSO of Poland

UNECE Questionnaire on Methods of Poverty Measurement in Official Statistics In January 2014, the Bureau of the Conference of European Statisticians established the Task Force on Poverty Measurement to develop guidelines and provide recommendations for improving international comparability and availability of statistics on poverty and the related metadata. The Task Force has prepared this survey to ensure that its work takes into account the methodology and policy concerns in the countries.

Answers received from 44 countries, including:o37 countries of UNECE region (37 of 56)o7 countries outside the UNECE region (Australia, China, Columbia, Japan, Mongolia, New Zeland, Mexico)

UNECE Questionnaire on Methods of Poverty Measurement in Official Statistics

Methods of poverty measurement

Monetary poverty•Among countries which took part in the survey, the largest group includes countries where both, absolute and relative poverty are being measured.•The least number of countries apply only the absolute approach to poverty measurement.

Absolute poverty•Generally, levels of poverty thresholds allow to meet the basic needs of the households

•Among the countries surveyed, there are applied various methods of determining the poverty thresholds (basic needs method, food expenditure rate method, combination of different methods).

•Most of the countries assess a range of the absolute poverty on a basis of income, however several countries use the level of expenditures/consumption to calculate it. The assessment of the poverty range on a basis of expenditures is applied in the countries where there are also conducted the income surveys (i.e. Poland, Italy)

Relative poverty•The most common relative poverty threshold is 60% of median equivalised income (however some countries apply the threshold of 60% of median expenditures).

•In several countries, the relative poverty threshold is established at the level of 50% of median equivalent income.

•Very rarely, measurement of the relative poverty is conducted on a basis of both, income and expenditures. Moreover, sometimes poverty thresholds are established with a use of mean rather than median income/expenditures.

Indicators of welfare/wealth•Most of the countries use the categories of income•Applied categories of income are not fully comparable, i.e.: omonetary income vs. monetary income+income in kind, odifferent methods of data collection (surveys vs. administrative

records, assessments considering the macroeconomic data).

•Expenditures/consumption – monetary+non-monetary

Equivalence scales•The most commonly used are the normative scales:oModified OECD equivalence scale (1-0.5-0.3)oOriginal OECD equivalence scale (1-0.7-0.5)oSquare root scale (√n )

• In some countries, there are applied the ‘national’ equivalence scales (i.e. in Israel, Sweden, Ireland, Georgia)–sometimes together with the above-mentioned scales.

Subjective povertyResults of the exercise indicate that undersanding, defining and, in result, measuring of subjective poverty in different countries is very diversified:• Several countries treat the questions of the ability to meet various needs,

included in the indicators of deprivation, as the indicators of subjective poverty.• In some countries, a basis for the assessment of subjective poverty are

the questions of considering him/herself as poor by individuals.• Moreover, there are assessments based on the questions regarding the income

which is necessary to make the ends meet.• …

Other measures of poverty (including multidimensional poverty)

Similarly to the subjective poverty, there are many different approaches to the measurement of non-income poverty (including the multidimensional poverty):• Very common measures are the indicators of the material deprivation based on

both, international (i.e. Eurostat) or domestic solutions.• In some countries there are also applying the indicators which measure not only the

level of satisfaction of material needs but also consider the non-material aspects.• Furthermore, there are assesed the aggregate indicators which consider the

overlapping of different poverty and social exclusion forms (i.e. the at-risk-of-poverty or social exclusion rate in the EU member states or multidimensional poverty in Mexico).

Summary Results of the survey indicate that, in context of international comparisons, it is necessary to work out the common view on both, operational definitions of different poverty forms as well as applied methodological solutions.

Issues for the discussion•Poverty and social exclusion – dillema of defining (in a context of multidimensional poverty).

•Absolute and/or relative poverty – should refer to the situation in particular countries, group of countries or should be common for all of the UNECE member states?

•Choice of the indicator of welfare and its definition.

•Which equivalence scales should be applied? Does ‘comparable’ mean always ‘the same’?

•Is it possible and necessary to prepare a common list of the indicators of deprivation for all of the UNECE member states?

•…?