Revisiting Poverty Measurement: Testing the Staple Calorie Share Approach

Transcription

1 Revisiting Poverty Measurement: Testing the Staple Calorie Share Approach Wengelawit K. Tessema 1, Getachew A. Abegaz 2 and Fitsum Z. Mulugeta 3 1 Enterprise Partners 2 International Food Policy Research Institute 3 Ethiopian Economics Association July 21, th International Conference on Ethiopian Economy

2 Outline Background Motivation Staple Calorie Share Approach Data, Method and Results The way Forward

3 Results Staple Calorie Share (SCS) approach improves poverty measurement

4 Background Puzzle: Decades of significant economic growth resulted in decrease of average calorie intake in India and China (Jensen and Miller, 2010) This means that economic growth in Indian and China was accompanied by increase in headcount poverty

5 Poverty line Background cont.

6 Background cont. Traditionally headcount poverty is measured based on a minimum caloric intake threshold level Particularly that of food poverty is determined by using a threshold of 2,300 kilocalories per day per adult Important policies use results from indices computed this way for decision making (e.g. the first goal of MDG)

7 Motivation There are a number of limitations for this approach 1. Not all nutrients are absorbed 2. Income elasticity of demand for calories (substitution towards high level of non-nutrient attributes when income increase) 3. What is the correct minimum threshold level and how should it be measured 4. Thresholds vary across individuals based on Age, Sex, Height, Weight, Health status, Physical activity, lean and muscle body mass, fitness level, stress level and basal metabolic rate

8 Staple Calorie Share Approach Solution: An approach based on consumer behavior and revealed preferences How it works: Consumption below caloric or subsistence thresholds imposes disutility Physical sensation of hunger, headaches, pain, dizziness, loss of energy, inability to concentrate, etc. High marginal utility for additional calorie Consumers chose cheep sources of calories at low levels of income (staples)

9 Staple Calorie Share Approach cont.

10 Staple Calorie Share Approach cont. How it works (cont.): As income increase marginal utility of calories decrease Consumers substitute towards more expensive sources of calories that have high non-nutritional value (taste and variety) This substitution shows that they have surpassed subsistence

11 Staple Calorie Share Approach cont. This indicates that the percentage of calories consumed from a staple food source Staple Calorie Share (SCS) can be used as an indicator of nutritional sufficiency Hence the Staple Calorie Share (SCS) approach

12 Data, Method and Results SCS estimates were made in the framework The 2011/12 Ethiopian Socioeconomic Survey (ESS) dataset was used for these estimations Survey is the 1 st wave of a set of panel surveys Conducted by the world band and CSA

13 Data, Method and Results cont. FAO s definition of Staple food: one that is eaten regularly and in such quantities as to constitute the dominant part of the diet and supply a major proportion of energy and nutrient needs Food items considered staple are Teff, Wheat, Sorghum, Maize, Barley, and Enset following Berhane et al (2011) All food consumptions were accounted for, standardized and converted into calories

14 Data, Method and Results cont. Minimum caloric requirement of 2300 kilocalorie per adult equiv. per day was used as food poverty line A preliminary result shows that 61 percent of sample is below the minimum caloric requirement Interest lies in the SCS for those above and below this caloric requirement

15 Data, Method and Results cont. Food poverty rates using the traditional method Food Poverty Rates Region Traditional SCS (at 80%) Tigray 48.21% 46.88% Amhara 74.72% 35.72% Oromia 48.46% 41.04% SNNP 67.59% 39.59% Other regions 59.30% 20.99% National 61.06% 38.61%

16 Data, Method and Results cont. Asset groups AVERAGE SCS POOREST RICHEST

17 The way forward Panel data better suits this analysis to see the dynamics of SCS A more disaggregated definition of staples by region and more is needed The above results depend on which crops are staples and which are not and hence a clear distinction should be made Finally, this approach complements the traditional approach of poverty measurement

18 Enkosi Kea leboha Zikomo Kwambiri Siyabonga kakulu Asante sana Thank you አመሰግናለሁ Ndatenda N itumezi Ngiyaboga Murakoze Masvita Zicoma