Poverty measurement: experience of the Republic of Moldova

UNECE, Measuring poverty, 4 May 2015

The HBS is the important source of economic and social data, it provides data on: i) measures of living standards, ii) consumption and income structure, iii) weights for consumer price index and iv) various estimates for the National Accounts.Data collection method: -paper based interview, face to face interview and self recording of diarySurvey tools:- Household roster: socio and demographic characteristics, education, employment, housing, land, etc.- Diary: income, expenditure (cash, in-kind)- Non-response sheet: reasons of non-responses and key variable on non-respondent

Data collection (1)

Sampling: -net sample size 9768 hhs, response rate is 62%.-rotation scheme: i) every second year 20% of PSUs are replaced; ii) 50% of hhs are part of four years panel sub sample.Recording period:-one month: household roster during the 3 mandatory visits, diary is split into 2 parts (first and next fortnight).Reference period:-Income: i) current month and ii) last 12 months for remittances, income from agriculture.-Expenditures: i) current month and ii) 2 weeks for purchased food and beverages, iii) last 6 moths for infrequent goods (clothes, footwear, etc.), iv) last 12 months for utilities, durable goods, expenditures for agriculture.

Data collection (2)

Poverty line evolution

Absolute poverty line:1993-2000 – Minimal consumer budget2000 up to now– Subsistence level 2004 – first absolute poverty line approved by Strategy of economic growth and poverty reduction (SCERS) 2006 up to now– revised absolute poverty line and approved by Government Decision:- food and non – food component (total)- food component – extreme poverty line2009 up to now – national threshold used for mean tested social allocation for poor

International poverty line/MDG indicators: starting with 2005:

- $1, $2,15- and $4,3 (PPP)

Relative poverty line:60% of median income (international comparison)Subjective poverty: up to 2008: based on self estimation of minimum needs of households

Background information

Basic need approach: Food component: based on the need to meet certain

minimum nutritional requirements (2282 calories per day) and actual consumption patterns observed in the data for a specified population group (the population of interest to be the lower part of the distribution, from the second to the fourth deciles). In fact focusing on the population located in the low end of the welfare distribution, we are more likely to reflect the preferences of the poor as well as the prices that they face.

Non-food component: is computed as a mean multiplier among households whose expenditure lies within a small interval around the food poverty line (+-10%).

Computation of absolute poverty line

Computation of welfare indicator

National absolute poverty line

Adjusted consumption aggregate: some items are excluded, adjustment to recall period longer than 1 month, price correction, equivalent scale 1:0,7:0,5

International poverty line $2,15 - average income per capita$4,3 - consumption expenditure per capita

Relative poverty line Median income, equivalent scale 1:0,5:0,3

Consumption expenditures are used as indicator of well-being. The following adjustment are made: for items, whose purchase is infrequent, but still more frequent

than once a year, expenditure are captured through appropriate recall periods (6 and 12 months);

items, which generally are purchased within intervals longer than one year (namely durable items) are excluded from consumption aggregate;

correction for price differences over time and across different areas of the country (namely urban and rural areas);

adjustment of expenditure measured at the household level to identify individual consumption levels (1:0,7:0,5).

no imputation.

Computation of welfare aggregate

Computation of consumption expenditure

Total Urban Rural

food 87,7% 78,2% 94,7%

plus beverages 85,0% 74,2% 92,9%

plus clothes 64,5% 53,2% 72,9%

plus dwelling 34,6% 20,3% 45,1%

plus equipment of dwellings 31,1% 17,7% 40,9%

plus health 25,3% 14,4% 33,3%

plus transport 22,7% 12,1% 30,5%

plus communication 19,5% 10,0% 26,6%

plus miscellaneous/Total poverty rate 16,6% 8,2% 22,8%

Poverty rate varies a lot depending on the items included in the consumption expenditure

Poverty rate 2006-2014

20,0

3,5

23,0

0

5

10

15

20

25

30

35

2006 2007 2008 2009 2010 2011 2012 2013 2014 Target 2015MDG

The share of population below the absolute poverty line, % The share of population below the extreme poverty line, %

The share of population with under 2.15 USD per day income, % The share of population with under 4.3 USD per day consumption, %

The share of population at risk of poverty (after transfers), %

Poverty profile

12,7

4,6

18,8

1

9,1

18,8

10,412,7

34,6

0

5

10

15

20

25

30

35

40

tota

l

urba

n

rura

l

big

citie

s

smal

lci

ties

rura

l

1 ch

ild

2 ch

ildre

n

3+ch

ildre

n

Main factors which determines the vulnerability: Migration:- children left without parental care- migrant women Elderly people Rural households which relies mainly on agricultural activity

and social aid Households with many children Ethnic groups, such as roma population.

Vulnerability to poverty

Vulnerability to poverty

Poverty reduction after social transfers

2,4%

1,6%

3,1%

0

0,01

0,02

0,03

0,04

0,05

0,06

2007 2008 2009 2010 2011 2012 2013 2014

Total Urban Rural

Poverty rate, 2013

1

9,1

18,8

12,7

5,9

24,9

35

26,1

0

5

10

15

20

25

30

35

40

big cities small cities villages total

with remmitances without remmitances

Vulnerability to poverty

Data collection: High non-response rate in urban area Respondent burden and how to manage data quality Treatment of outliers in consumption aggregate, such as out of

pocket health expenditures, expenditures for utilities, etc. Moving to mixed mode of data collection PAPI+CAPI Use of census data and if relevant administrative dataPoverty measurement: Updating and revision of absolute poverty line, comparability

issues Moving from material measurement to multidimensional

approach Explore panel data as proxies of vulnerability Development and approval of the national set of social

inclusion indicators in accordance with EU requirements

Main challenges

Thank you for attention!