Poverty incidence and poverty profiling
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6 Poverty incidence and poverty profiling
SUMMARY.
The Cost of Basic Needs estimate of poverty reveals that 36 percent of the Afghan population is not able to meet their basic needs. The incidence of poverty is very unevenly distributed and pockets with
very high poverty rates are found among the Kuchi population 54 percent and in South, West-Central and East regions of the country more than 44 percent. Poverty among the Kuchi’s is not only more
widespread, poor Kuchi’s are also signiicantly poorer than the rural and urban poor. Although the national Gini index of 29 is low in international perspective, substantial inequality exists in shares of consumption:
whereas the richest quintile of the population has a share of 39 percent of total consumption, the poorest quintile has only 9 percent. Noticeably, the average consumption level of the second – non-poor – quintile
is only little above the poverty threshold of 1,255 Afs, suggesting that a signiicant proportion of these are vulnerable to falling under the poverty line. Average per-capita monthly consumption expenditure of
poor Afghans is only 950 Afs, but the corresponding igure for the non-poor is still less than 2,100 Afs. Poverty incidence is signiicantly associated with household size and number of children in the household.
It is likely that high fertility is an important contributing factor to poverty in Afghan households. Also various characteristics of the head of household and of household members are correlated with poverty. This is
particularly the case for the sex of the household head, and the head’s educational attainment, employment status and industry of work. Child labour and seasonal migration are coping strategies that seem particularly
to be employed by poor households, and net primary and secondary enrolment of poor children 50 and 13 percent, respectively is lower or substantially lower than that of non-poor children respectively, 53
and 18 percent. Access to land is also importantly related to poverty: whereas 26 percent of land-owning households are poor, this is the case for no less than 42 percent of households that cultivate land on the
basis of renting, sharecropping or mortgaging arrangements. Finally, the face of poverty is revealed in poor access to basic services like safe drinking water, improved sanitation and electricity.
6.1 Introduction
The measurement of poverty, its geographic distribution, its evolution in time and its relation to key demographic and socio-economic variables are critical to understand the causes and consequences of material deprivation, design
effective poverty reduction policies – such as the Afghanistan National Development Strategy ANDS – and monitor the progress towards higher levels of material well-being.
Poverty is a multidimensional phenomenon and accordingly there is a wide variety of approaches to its measurement. Conventionally poverty has been defined in terms of income or expenditure based on the assumption that persons’
material standard of living largely reflects their well-being. The poor are then identified as those with a material standard of living below a certain level. The analysis in this chapter follows the method advocated by the World Bank and is based
on the so called Cost of Basic Needs CBN approach.
This chapter begins with a brief description of the main poverty measures applied in the present poverty analysis of Afghanistan Section 6.2. Further details, technical backgrounds and assumptions are described in detail in Annex V.
Section 6.3 provides the general poverty estimation and its temporal and spatial distribution, and the subsequent section elaborates on the issue of inequality in the country. Section 6.5 explores several correlations with other development
indicators, such as employment, disability, literacy and access to land. This analysis offers a more in-depth profile of the poor in Afghanistan and the possible sources of vulnerability. The findings presented in these sections can inform policy
makers and programme designers about the appropriate interventions for poverty reduction and development.
Poverty incidence and poverty profiling
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6.2 Conceptualization of poverty
The welfare of a person can be determined by the amount of goods and services he or she consumes. Consequently, poverty
can be defined as a condition of deprivation characterised by a lack of food, clothing, shelter and a possible other array of
human needs. According to the relative approach, wealthier societies will have a relatively higher poverty line as the concept
of deprivation is assessed with respect to a living standard that is generally considered as an acceptable minimum in a specific
society at a specific time. The poverty line is then often expressed as a percentage 40-60 percent of a central tendency indicator
average or median of the per-capita income or consumption distribution. Such relative conceptualisation of poverty extends
beyond the basic physiological needs. In contrast to the relative approach, the absolute conceptualisation of poverty assumes it
is possible to define a minimum standard of living based on a persons’ physiological needs for food, water, clothing and shelter
– that is, their basic subsistence needs. Among the advantages of the absolute approach is that there are reasonably objective norms for poverty measurement, and that it allows for comparisons over time or between different groups, and it
is thus well suited to monitor progress in a society that starts off from extremely low levels of material well being.
The present analysis is based on an absolute definition of poverty. It assumes that people live in conditions of poverty if the basket of goods and services they consume is insufficient to produce a minimum level of material well-being.
The threshold for this level of basic needs – the CBN poverty line – is calculated on the basis of the monetary value of the minimum basket of goods and services. The poverty line that is applied here captures the value of per-capita
food consumption that is required for survival and the value of a basic set of non-food goods and services available to individuals. Although one should recognize that poverty measured in terms of per-capita consumption is strictly speaking
a measure for economic welfare only, its impact clearly involves wider dimensions, as in most settings, consumption is closely associated with other dimensions of welfare, such as education or health.
The headcount rate indicates the proportion of the population with a per-capita consumption that is below the poverty line. Whereas this indicator provides information about the share of poor people in the population, the poverty gap index
measures the depth of poverty, by calculating the mean aggregate consumption shortfall relative to the poverty line across the whole population. The poverty gap gives an indication of the total resources required to bring all the poor up
to the level of the poverty line. The squared poverty gap provides a measure of the severity of poverty by assigning a greater weight to the poor who are further away from the poverty line.
6.3 Poverty across space and time
The overall headcount rate for Afghanistan is estimated at 36 percent of the total population and indicates that some 9 million Afghans are not able to meet their basic needs. The national average poverty line is 1,255 Afs. per person per month,
representing the typical cost of attaining 2,100 calories per person per day and of meeting some basic non-food needs.
1
A breakdown of the poverty incidence reveals that the incidence is high in any part of the country, but large differences exist by
residence and regions. Whereas poverty in the rural population is close to the national average 36 percent, the incidence in the urban population is relatively low 29 percent and in the Kuchi population very high 54 percent
Figure 6.1. The corresponding figures for major regions range from 23 percent in Southwest to 45 percent in East and West-Central.
2
The depth of poverty is a considerable 8 percent, which indicates that when averaged over the total population, there is an 8 percent gap between the poverty line and consumption levels treating the non-poor as having a gap of zero.
Alternatively, when focusing on the population of poor people, the ratio of the poverty gap to the headcount index reveals that the average consumption level for poor people is 22 percent below the poverty line. The sum of all differences
between the CBN poverty line and the consumption level of poor people provides a measure of the total consumption shortfall.
3
In terms 2007 prices quarter 1, this gap is about 28.4 billion Afs. or approximately 570 million USD.
Poverty measures
The headcount rate or poverty incidence is the proportion of the population whose per-capita consumption is below the
poverty line. The poverty line or poverty threshold is the minimum level of
per-capita consumption expenditure at which the members of a household can be expected to meet their basic needs
comprised of food and non-food consumption.
The poverty gap index is a measure of the ‘depth of poverty’
and provides information about the extent to which individuals fall below the poverty line as a proportion of the poverty line.
The squared poverty gap index is a measure of ‘poverty severity’
and the inequality among the poor, by taking into account the distribution of persons’ consumption distance to the poverty line.
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1
In terms of fall 2007 prices from urban areas of central Afghanistan. The poverty line reflects regional differences in the cost of living, and also accounts for inflation over the time of the survey.
2
Central: Kabul, Kapisa, Parwan, Wardak, Logar, Panshir; South: Ghazni, Paktika, Paktya, Khost; East: Nangarhar, Kunarha, Laghman, Nuristan; Northeast, Badakhshan, Takhar, Baghlan, Kunduz; North: Samangan, Balkh, Jawzjan, Sar-I-Poul, Faryab; West: Badghis, Herat, Farah; Southwest: Nimroz, Hilmand,
Kandahar, Zabul, Urozgan; West-Central: Ghor, Bamyan, Daikundi.
3
This is sometimes described as the cost of eliminating poverty if it were possible to costlessly and perfectly target cash transfers to the poor.
