Xavier Mancero

Statistics Division, ECLAC

The Role of Administrative Records and Complex Surveys in the Monitoring and Evaluation of Public Policies

Rio de Janeiro, 3-4 November 2014

Multidimensional approaches to poverty are not new, but there is a renewed interest in them as tools to inform public policy. The multidimensional approach is best suited to new conceptual frameworks on welfare ◦ Rights approach ◦ Capability approach

Income provides an incomplete assessment of living standards. ◦ Possible underestimation of the poverty level ◦ Possible bias characterizing poverty ◦ Income poverty measure does not account for the impact of

public policies in various areas of welfare

Mexico (2008) and Colombia (2011) have established official multidimensional measures.

The multidimensional measurement requires assessing whether people are able to pass the minimum thresholds in each of the dimensions considered.

This requires ◦ selecting the dimensions and indicators

◦ setting minimum thresholds for each dimension and

◦ combining the results into a synthetic indicator

Some recurrent questions ◦ Is any deprivation (lack of capacity or lack of rights) an

expression of poverty?

◦ Is an aggregate index needed?

◦ Which weights should be used (in the aggregate index)?

◦ Can we get adequate information to capture the relevant dimensions?

It incorporates elements from the perspective of rights, capabilities and unmet basic needs. ◦ These traditions are not opposites, but realize different

aspects of deprivation.

◦ The available tools usually do not allow for distinctions in their quantification

Based on the traditional indicators of Unmet Basic Needs

Added measures of deprivation and exclusion from income

Aggregate indexes based on Alkire & Foster (2007).

Poor = 2 or more deprivations

DIMENSIONS AND DEPRIVATION INDICATORS weight

WATER AND SANITATION (1/6)

Improved watersources

Urban: any source except public system. Rural: unprotected wells, bottled water, mobile sources, rivers, rain, other.

1/12

Toilet facility Urban: no sanitation or toilet not connected to sewer system or septic tank. Rural: no sanitation, or untreated toilet system.

1/12

ENERGY (1/6)

Electricity HH with no electricity 1/12

Cooking fuel hazardous to health

HH that use firewood, coal or waste for cooking. 1/12

DWELLING (1/6)

Housing materials Dwellings with dirt floors, in rural and urban areas, or roof and walls made of makeshift materials.

1/12

Crowding Three or more people per room, in rural and urban areas. 1/12

EDUCATION (1/6)

Non-attendance at school

At least one child of school age (6 to 17 years old) that does not attend school. 1/12

Non-attainment of minimum level

Household has nobody aged 20 or above with a minimum level of schooling.- Persons aged 20 to 59: have not completed lower secondary education.- Persons aged 60 and above: have not completed primary education.

1/12

INCOME Per capita income below cost of basic food basket 1/6

EXCLUSION (1/6)

Youth not studying orworking

At least one youth aged 18-29 who does not study or have a paid job 1/12

social protection At least two of the following situations: No person of a health risk group (less than 5 years, women 15 to 49 years and adults over 60) has health insurance No employed person affiliated to pension fund No elderly has pension or retirement (men 65+ yrs, women 60+ yrs)

1/12

Latin America (18 countries): Adjusted headcount index (M0) of poverty withdifferent thresholds (k), 2011

Source: ECLAC, Social Panorama 2013

0

10

20

30

40

50

60

70

80

90

Chile

Uru

guay

Arg

enti

na

Venezuela

Bra

sil

Costa

Ric

a

Ecuador

Colo

mbia

R. D

om

inic

ana

Méxic

o

Perú

Para

guay

El Salv

ador

Bolivia

Hond

ura

s

Guate

mala

b/

Sólo NBI NBI + Ingresos/c. Pobreza Ampliada

Latin America (16 countries). Headcount index, by different structures, 2011

Source: ECLAC, Social Panorama 2013

Collaboration between ECLAC and Oxford Poverty and Human Development Initiative (OPHI) for advancing towards a regional multidimensional poverty index. ◦ Based on Social Panorama 2013◦ Revision of certain thresholds ◦ New indicators are included

Housing tenure Educational lagUnemployment (+ discouraged and some inactives)

Weights◦ Equal weights (7.4%), excluding social security (3.7%) and income (14.8%). ◦ Deprivation of social protection less associated with the traditional

concept of poverty. ◦ Income income is itself a synthetic indicator of welfare.

Multidimensional threshold k = 23%. ◦ Poor = deprivation in a complete dimension plus an indicator from other

dimension; or deprivation in income and at least two additional deprivations.

◦ No person who is deprived in only one dimension is identified as multidimensionally poor.

DEPRIVATION INDICATORS WDWELLING 22,2%Housing materials Dwellings with dirt floor or ceiling or walls with precarious materials (waste,

cardboard, cans, sugar cane, palm, straw, other materials)7,4%

Crowding Three or more people per room 7,4%Insecure housing tenure Households that: a) live squatters or b) living in dwellings transferred or loaned. 7,4%

BASIC SERVICES 22,2%Water source Similar to SP 2013 7,4%

Sanitation Similar to SP 2013 + shared bathroom 7,4%

Energy No electricity or that use firewood, coal or waste for cooking. 7,4%

EDUCATION 22,2%

Non-attendance Similar to SP 2013 7,4%

Education lag At least one child aged 6 to 17 years in school is more than two years behind the level according to their age.

7,4%

Non-attainment Similar to SP 2013 7,4%

DEPRIVATION INDICATORS WLEVEL OF LIVING 22,2%Income Income below of the cost of a basket that covers food and non-food needs. 14,8%

Durable assets Households that do not have any of the following items: a) vehicle, b) refrigerator and c) washing machine

7,4%

EMPLOYMENT AND SOCIAL PROTECTION 11,1%Unemployment Households where at least one person aged between 15 and 65 years old are in

any of the following situations: - unemployed - Employee without pay - discouraged worker

7,4%

Social protection Households where all the following conditions are met: - No person has some sort of contributory health insurance- No person affiliated to a contributory social security system - No person has income from pensions or retirement

3,7%

Contribution of deprivations to adjusted headcount index (M0), 2012

Source: Preliminary results, based on work by Santos et.al. (2014)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

NIC09 GTM06 HND10 BOL11 ELS12 PRY11 MEX12 PER12 COL12 RDO12 ECU12 VEN12 CRI12 BRA12 URY12 ARG12 CHL11

D - Housing materials D - Crowding D - Tenure BS - Water BS - Sanitation

BS - Energy E - Schooling E - Attendance E - Lag ESP - Employment

ESP - Social protection LL - Assets LL - Income

The multidimensional measurement requires that all information comes from the same source. The information we currently have is insufficient and lacks comparability. ◦ Education: Indicators of access but not quality or competency in

adults. ◦ Housing: variables and categories not clearly linked to deprivations. ◦ Health: not measured in most regular surveys of the region.

Opportunity to review the content of household surveys (within the constraints of size/representativeness). Look for complementarity between income and multidimensional measurement. Moving towards the harmonization of certain basic dimensions. ◦ Working Group of the Statistical Conference of the Americas ◦ Multidimensional Poverty-Peer Network (MPPN)

Most countries in the region have official measures of monetary poverty.

All are part of the method of "cost of basic needs", albeit heterogeneously.

ECLAC poverty measurements seek to generate a more comparable regional picture.

Measurements are currently in the process of updating: ◦ Based on the same general methodology.

◦ Consumption patterns based on recent Household Budget Surveys

0

10

20

30

40

50

60

1990 1993 1996 1999 2002 2005 2006 2007 2008 2009 2011 2012

Brasil America Latina

Source: Cepalstat

Brazil and Latin America. Poor population(Percentage)

Inadequate caloric intake is not so relevant today as it was 20 years ago.

Methods commonly used to select the reference population depend on caloric intake. ◦ First group, ordered by income, whose intake is equal to

the energy requirement. ◦ Iterative method: implicitly depends on the difference

between caloric intake and energy requirement.

Additional obstacle: quality of caloric intake measured by household budget surveys.

This requires special attention to the selection of the reference population and the basic food basket are appropriate.

0

10

20

30

40

50

60

Bo

livia

Nic

arag

ua

Re

p.D

om

inic

ana

Gu

ate

mal

a

El S

alva

do

r

Ho

nd

ura

s

Co

lom

bia

Ecu

ado

r

Par

agu

ay

Pan

amá

Pe

rú

Co

sta

Ric

a

Arg

en

tin

a

Bra

sil

Ch

ile

Mé

xico

Uru

guay

Ve

ne

zuel

a

Am

éri

ca L

atin

a

1990_1992 1999-2001 2012-2014

Source: CEPALSTAT, FAO online database

Population below minimum level of food energy(Percentage)

1500

1700

1900

2100

2300

2500

2700

2900

3100

3300

Pan

ama

(20

07

)

Pe

ru (2

00

8)

Ve

ne

zue

la (2

00

8)

Par

agu

ay (

20

11

)

Gu

ate

mal

a (2

00

6)

Ho

nd

ura

s (2

00

4)

Bo

livia

(2

00

3)

ElSa

lvad

or

(20

06

)

Co

lom

bia

(2

00

7)

Nic

arag

ua

(20

05

)

Ch

ile (2

00

7)

RD

om

inic

ana

(20

07

)

Ecu

ado

r (2

01

1)

Co

sta

Ric

a (2

00

4)

Uru

guay

(2

00

6)

Me

xico

(20

12

)

Bra

sil (

20

08

)

Arg

en

tin

a (2

01

2)

Encuesta de Presupuestos Familiares Hoja de Balance FAO

Source: FAO; CEPAL

Average energy consumption, according to food balance sheets and household budgetsurveys

(Daily kilocalories per person)

The non-food component of the poverty line comes from the ratio of total expenditure to food expenditure in the reference population (Orshansky coefficient). All costs of the reference population reflect needs associated with "poverty"? ◦ If there is underestimation of spending on food, the OC is

overestimated. ◦ Non-food expenditure may include non-basic items.

Several countries have changed the observed OC with different criteria: ◦ Colombia: exogenous OC, AL average for urban areas. ◦ Mexico: exclusion of items based on income elasticity,

perceived need, minimum percentage of households consuming.

◦ Dominican Rep.: exclusion of items from category "other" and other superfluous goods.

◦ Uruguay: observed OC without exclusions.

1.0

1.5

2.0

2.5

3.0

3.5

MEX

BO

L

PA

N

SLV

ECU

CR

I

GTM UR

Y

NIC

PR

Y

CO

L

VEN

HN

D

RD

O

CH

L

AR

G

BR

A

Source: ECLAC, on the basis of household budget surveys

Ratio of total expenditure to food expenditureObserved vs. Implicit in current poverty lines

Urban areas (ca. 2012)

ECLAC measurements apply to income measured in surveys a factor ...

... calculated according to the discrepancy with National Accounts;

... to the main sources of income;

... property income adjusted only for the richest quintile.

This practice faces several limitations: ◦ Lack of availability of household accounts of income and expenditure

in several countries.

◦ Misattribution of the discrepancy between the two sources only to "underreporting in the survey."

◦ Overestimation due to omission of higher-income households in the survey.

◦ Introduction of bias in the structure of income measured by the survey.

Evidence favors not to continue using this procedure