Household income and expenditure survey (HIES) : analytical report IV : poverty & inequality 2016

Abstract

Around the world, countries use a wide variety of poverty measurement methodologies. Given the multitude of concepts, the purpose of this chapter is to summarize key elements of poverty measurement in the Maldives and to provide an overview of welfare of Maldivians. One of the main objectives of the Household Income and Expenditures Survey (HIES) is to provide information on welfare and living standards and their distribution over households. Of particular importance is the measurement and tracking of welfare amongst the poorest segments of the population, and HIES survey data provide the principal means for estimating the extent and severity of poverty in the Maldives. A common method used to measure poverty is based on levels of consumption—a person is considered poor if his or her consumption level falls below some minimum level necessary to meet basic needs. This minimum level is usually called the “poverty line”. What is necessary to satisfy basic needs varies across time and countries. Therefore, poverty lines vary in time and across countries, and each country uses lines which are appropriate to its level of development, societal norms and values. Poverty is not easy to define and different definitions exist. A broader approach refers to poverty as a state in which individuals’ capabilities are unacceptably low as viewed by society (Sen, 1992). Sen’s approach defines capability by considering not only what people have in material possessions but also what people do or are capable of doing. A narrow approach of poverty refers to the lack of command over basic consumption needs (e.g. too little food energy intake; too little leisure). Poverty is certainly a complex and multidimensional phenomenon which makes it difficult to measure. This chapter therefore aims at briefly laying out the methodological framework of measuring poverty in the Maldives using a relative poverty line and presents findings of applying the poverty concepts in the context of the Maldives. For the purpose of this chapter, poverty is the pronounced deprivation in well-being (World Bank, 2000) defined as whether households or individuals have enough resources or abilities to meet their needs (Ravallion, 2016). Poverty is also multidimensional in nature and can include low incomes and the inability to acquire the basic goods and services necessary for survival with dignity but also low levels of health and education, poor access to clean water and sanitation, inadequate physical security, lack of voice, and insufficient capacity and opportunity to better one’s life.