1. 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

2. 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

3. 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.

4. 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