Measurement of Poverty

Poverty is more than physical deprivation. It has social and psychological effects, which prevent people from realizing their potential. Poverty can be measured in different ways. But limited resources and manpower mean that this is difficult to do, both on a national level and at the level of the household. However, both national and international organizations are making efforts to improve the collection of socio-economic data with the aim of better analysis and planning. Now for the poverty measurement, we can explain mainly two broadest measurements. Such as, National level measurement and household level measurement.

If we want to measure the poverty status of a country we must consider the national level method. It has also four methods. They are,

• Head count ratio
• Basic Needs Index (BNI)
• Integrated Poverty Index (IPI)
• Food Security Index (FSI)

Head Count Ratio: In this process per capita food intake and per capita income are considered to measure the poverty. In this method we can divide the poverty into two types i.e. poor and absolute poor. In the context of per capita food intake, if a man take less than 2122 but more than 1805 kilocalorie food in a day is poor and if a man take less than 1805 kilocalorie food in a day is absolute poor. On the other hand, in the context of per capita income, if the per capita income is less than $375 but more than $273 is poor and if it is less than $273 is absolute poor. It can be expressed by an index.

Hp=Np/N.

Here,
Hp=Head-count ratio;
Np=Set of population below the poverty line;
N= Population size.

Basic Needs Index (BNI): BNI method is comparatively better than the pervious method. In this method is considered the access to health facilities and education as the main factor of poverty measurement. Infant mortality rate, no of physician for people, sanitation, supply of pure drinking water and adult literacy, primary school enrolment etc. are the components of this method.

In this method the index can take value from 0 to 1. If the closer the value to zero the country is more needy. In this method we can classified the total population into three groups. They are 1) very needy; 2) moderately needy; 3) relatively less needy. If the BNI value is less than or equals to 0.5 the people are very needy, if it is more than 0.5 but less than or equals to 0.75 the people are moderately needy and if it is greater than 0.75 the people are relatively less needy.

Integrated Poverty Index (IPI): It is the most effective method for calculation of poverty status. In this method, income gap ratio, growth of GDP per capita and head count ratio are considered. IPI is calculated by combining the percentage of the population below the poverty line, with the income gap ratio, the distribution of income among the poor and the annual rate of GNP per capita. The income gap ratio is the difference between the highest GNP per capita from the selected country and the GNP per capita of any particular country.

The IPI can take values between zero to one; the closer the value is to one, the worse of the poverty. Countries are classified in to three groups; severe poverty, moderately poverty and relatively little poverty. When IPI is greater than or equals to 0.4 the country is severe poor, when IPI is less than 0.4 but greater than or equals to 0.2 the country is moderately poor and when the IPI is less than 0.2 the country is relatively less poor.

Food Security Index (FSI): The FSI method considers food production and food consumption to measure the poverty. It combines measures of calorie availability, the growth of per capita energy supply, food production, food staples self sufficiency and variability in food production and consumption. Country, which have high food production potentials and/or high import capacity and which experience a low level of variability of production and consumption would have a high food security status as reflected in the relatively high value of FSI.

Actually, FSI ranges from zero to one. If the FSI value is greater than or equals to 0.8 is having a medium food security and less than 0.8 is having low food security status.

Further, when we conduct a study of the household level, we can collect the necessary data and information on the basis of the given method. The following components are considered to calculate the poverty status of a locality. Such as---

• Material deprivation(food intake, lack of education, housing, health condition)
• Isolation from geographic location
• Alienation
• Insecurity
• Lack of assets
• Dependency
• Lack of decision making
• Vulnerability to access etc.