REGIONAL POVERTY ANALYSIS TECHNICAL WORKSHOP Estimating the Incidence of Poverty from the BNPL David Abbott (Regional Macroeconomic and Poverty Reduction Advisor UNDP Pacific Centre) REF: Working Paper 3.4

Issue National Basic Needs Poverty Lines (BNPL) give a measure of “relative” poverty within countries or regions Poverty does not just mean starvation or destitution Every country experiences a measure of relative poverty, those that are disadvantaged relative to their neighbours “Absolute” poverty, the notion of US$1 per day (MDG1) not yet available for PICs, and likely to be quite low in most countries How to estimate proportion of population that would fall below BNPL

Main Approaches Head Count Ratio/Index: proportion of households/population that have per capita adult equivalent income/consumption below BNPL Advantages relatively easy to construct relatively easy to understand Disadvantages treats all poor as having the same degree of poverty does not take account of depth (or severity) of poverty; the index does not change unless those below the poverty line actually move above it, households could become significantly less poor but still remain below the poverty line.  

Recommended Approach Head Count Index should be the core poverty indicator but; that it be supplemented by measures of the depth and severity of poverty and changes in the level of inequality