Poverty and its measurement

It is about poverty and its measurement and including some of data regarding poverty in different province of Nepal.

1. Poverty and its Measurement Presented by: Lekha Koirala

2. Poverty Meaning and definition Poverty is the deprivation of food shelter money and clothing when people cant satisfy their basic needs. Poverty can be understtod simply as a lack of money or more boardly in terms of barriers to everyday human life. Poverty is about not having enough money to meet basic neds including food, clothing and shelter. According to World bank “Poverty is hunger poverty is lack of shelter. Poverty is being sick and not able to see a doctor. Poverty is not having access to school and not knowing how to read. Poverty is not having a job, is for the future living one day at a time.

3. Poverty Meaning and definition Borotz and grigsby refer poverty a severe lack of physical and mental well being closely associated with inadequate economic resources and consumption( 1971). Deleeck refer poverty is not restricted to one dimension eg: income but it manifest itself in all domains of life such as housing, education, health (1992). Ashton writes deprivation is surely about essential needs that are unmet. This may be due to a lack o money resources but it need not be (since adequate resources may be misspent). Poverty on the other hand must refer to the lack of money necessary to meet those needs (1984).

4. Absolute and Relative Poverty There are two types of poverty: Absolute poverty : It refers to the state of severe deprivation of basic human needs. It is related to level of income needed to fulfill basic needs. It is found in developing countries. It can be measure using poverty line. It remain consistent over a time.

5. Absolute and Relative Poverty Relative Poverty It is defined contextually as economic inequality in location or society in which people live. It is related to economic status of others in society. It is found in developed countries. It can be measure using gini coefficient and lorenz curve. It changes over atime.

6. Facts and figure of poverty Around 1.29 billion people were in absolute poverty in 2008. About 400 million people in absolute poverty in india and 173 million people in china. Around 433 million african are in extreme poverty in 2018. Between 1990 and 2010 about 663 million people moved above the absolute poverty level. Every year 11 million children living in poverty die before their 5th birthday. 1.02 billion people go to bed hungry every night. Almost 90% of materal deaths during childbirth occurs in asia and sub sahara africa. In zimbabwe no of girls are turning to prostitution for food to survive because of increasing poverty.

7. Facts and figure of poverty The covid 19 pandemic pushed an additional 97 million people into extreme poverty in 2021. In Nepal 4.9 million people are under poverty which is 17.4% of nepal population in 2021.

8. Status and trends of poverty in Nepal In 2019 17.4 percent of nepal population are multidimensinally poor. Across indicator higher number of people are deprive in housing, materials, clean, cooking ,fuel, years of schooling, access and nutrition. 28 percent of rural are MPI poor compared with 12.3 percent in urban areas. 39.5 percent of people in karnali province are Multidimensionaly poor. 25.3 percent in sudurpacchim are Multidimensionally poor.

9. Status and trends of poverty in Nepal Gandaki Province has 9.6 percent people are muldidimesionally poor. Bagmati province has 7.0 percent multidimensinally poor people. However The MPI of nepal is progress from 30.1 percent to 17.4 percent over the time frame of 5 years.

10. Population below poverty line.

11. Poverty below the poverty line Absolute poverty is declining as we compared the data of 1990- 2020. Absolute poverty is declined from 49 -18 percent. Absolute poverty decline by 20 percent.

12. Lorenz curve Lorenz curve is a graphical representation of of the distribution of income or wealth within a population. in economics the lorenz curve is a graphical representation of the cumulative distribution function of the empirical probability distribution of wealth it is a graph showing the proportion of the distribution assumed by yhe y% of values. It is often used to represent income distribution in society. Greater the lorenz curve greater will be the relative degree of inequality.

13. Lorenz curve

14. Gini coefficient Gini coefficient is a statistical measure of the degree of variation represented in a set of values used especially in analyzing income inequality. In economics the gini coefficient is also known as the Gini index or Gini ratio is a measure of statistical dispersion intended to represent the income inequality or the wealth inequality or the consumption inequality within a nation or a society group. For Eg: if everyone has the same income the Gini coefficient will be zero.

15. Gini coefficient

16. Measurement of poverty: There are various measures of the extent of povert The head count index The poverty Gap The squared poverty gap

17. Head count index Head count index: By for the most widely used measure is the headcount index, which simply measures the proportion of the population that is counted as poor often denoted by Po P o = N P /N where N p = The number of poor N= the total population

18. Virtue It is simple to cnstruct It is easy to understand

19. Limitation It doesnt take intensity of poverty into account. it doesnt indicate how poor the people are . he poverty estimates should be calculated for individuals and not households.

20. Poverty Gap index Poverty gap index adds up the extent to which individuals on average fall below the poverty line and expresses it as a percentage of the poverty line. P1=1/N ∑G 1 /z where G=Poverty line z=Less actual Y 1 = Poor individual

21. Virtue It doesnot imply that there is a discontinuity at a poverty line.

22. Limitation This interpretation is only reasonable if the transfer could be made perfectly efficiently.

23. Squared poverty gap: Squared poverty construct a measure of poverty that takes into account inequality among the poor. By squaring the poverty gap index the measure implicity puts more weight on observations that well below the poverty line. P 2 = 1/N where P 2 = Squared poverty gap y 1 = Actual income z= Poverty line

24. Virtue It takes into account inquality among poors

25. Limitation It lacks intuitive appeal. It is not easy to interpret. It is not widely used.

26. Thank you