Poverty Monitoring Group (PMG)Meeting

December 4, 2013

An Introduction to the HBS 2011/12 Poverty Estimates

Isis Gaddis, World Bank

Introduction

• On Nov 14 the NBS released the poverty estimates for the 2011/12 Household Budget Survey (HBS)– Show a national poverty headcount (for mainland Tanzania) of 28.2%

(in 2011/12)

• A few days later NBS released the Key Findings report• The 2011/12 poverty estimates are not comparable to 2007

due to improvements in ...– the survey instrument– the poverty estimation methodology

• NBS (jointly with the WB and consultants) is currently re-analyzing the 2007 HBS data to assess the trend in poverty since 2007 (results expected for early 2014)

Poverty Estimates of the 2011/12 HBS

Poverty headcounts (%) based on the 2011/12 HBS

Poverty line = 36482.0 (basic needs poverty) Poverty line = 26085.5 (food poverty)

Urban 15.5 Urban 6.0

Rural 33.3 Rural 11.3

Regions Regions

Urban 21.7 Urban 8.7

Rural 33.3 Rural 11.3

Dar-es-salaam 4.1 Dar-es-salaam 1.0

Total 28.2 Total 9.7

2011/12 Poverty Lines• Food poverty line (Tsh 26,085.5 per adult per month)– Based on the cost of a food basket that delivers 2,200

calories per adult per day– Cost are estimated at the food consumption patterns

prevailing in a reference population (2nd to 5th decile of the distribution of total consumption per adult equivalent)

– Calorie norm is within the range of what neighboring countries are using (e.g. Ethiopia 2,200 kcal per adult, Kenya 2,250 kcal per adult, Rwanda 2,500 kcal per adult, Uganda 3,000 kcal per adult)

2011/12 Poverty Lines (cont’d)• Basic needs poverty line (Tsh 36,482 per adult per

month)– Adds an allowance for basic non-food requirements

to the food poverty line– The non-food component is based on the average

non-food consumption of households whose total consumption is close to the food poverty line (71.5%)

– Scaling up the food poverty line by this ratio delivers the basic needs poverty line

– Variant of the so-called ‘lower bound approach’ of the cost of basic needs methodology (used by several countries in the region)

2011/12 Poverty Lines (cont’d)

• The 2011/12 basic needs poverty line (Tsh. 36,482) translates (roughly) into $1.36 per adult per day at 2005 purchasing power parities (PPP)

• This is effectively slightly below the international $1.25 a day poverty line because the latter is expressed per capita

• The gap between the Tanzania national poverty line and the international poverty line has declined – In 2007, the basic needs poverty line was estimated at Tsh. 13,998

per adult per 28 days– The increase is partly an effect of the improved survey instrument– Underscores the need for further analysis before drawing

conclusions about the poverty trend