APPROACHES TO POVERTY

ANALYSIS

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• Understanding poverty is important for
an organization in the business of
eradicating them. Knowing your enemy
is an important weapon in the war
against poverty.

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• But poverty is a very elusive and difficult
enemy. It wears different faces at different
times in different places.

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 Why is poverty analysis
important?
• Raise questions about how we allocate
resources and identify priorities.
• Better understand what is happening in the
countries and regions where we work
• Improve institutional transparency and
accountability
• Identify area for increased specialization and
investment

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What poverty analysis cannot
do is answer the basic
questions about political
choice

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 • Avoid technical fixes

• Avoid reductionism

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Absolute poverty is anchored on
a specified welfare level, a level
of living below which one can be
considered poor in an absolute
sense

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Relative poverty acknowledges that a society
may place a value on equity as well as the
attainment of absolute living standards;
poverty is not only a matter of deprivation
against some absolute standard but that the
experience of being poor is rooted in the
perception of where individuals stand in
relation to a social average.

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 The issue of inequality in the
concept of relative poverty

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 How poor people
themselves define poverty

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• Material deprivation (of income and
productive assets)

• Low social status (in terms of gender,

class, caste, race or ethnicity)

• Vulnerability (to sickness and to adverse

external shocks)

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• Isolation (including distance to markets,
and inadequate access to public services)

• Powerlessness (or inability to shape the

forces which influence life opportunities)

• Limited human capital (in terms of health

and education)

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 “Without any gender-specific
analysis, income-expenditure
poverty lines are likely to
understate the deprivation
suffered by women and girl
children.”

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 Approaches to Poverty Analysis

Absolute
income/ Relative Holistic
Capability
consumption poverty/ poverty
deprivation
poverty ($1 social (PRA)
(HDI)
per day) Exclusion

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Income consumption poverty lines

– Absolute poverty is linked to the

consumption of goods and services;
minimum basket of essential consumption
items

• Minimum line based on food basket for meeting

the most basic nutritional requirement
• Higher poverty line for good and other basic
needs (clothing and shelter)
• Universal poverty line is needed to make cross-
country comparison

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 – Absolute poverty line is advantageous in

• Establishing transparent indicators for

absolute want
• Identifying target population for poverty
reduction initiatives
• Capturing the income-consumption
dimension of poverty which is important
for almost all poor households

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 Human development indicators

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 – Indicators going beyond income

– Also called the capabilities approach

developed by Amartya Sen

– Incorporates proxy indicators for access to

health and education

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 – Advantages in using the HDI

• Capture the non-income dimensions of poverty

• Identify specific areas of deprivation
• Make comparisons between income and non-
income dimensions of poverty across different
regions and countries
• Identify gender gaps
• Identify difference between regions of the same
countries

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 Social Exclusion
– “Poverty is a standard of living so low that it excludes
and isolates people from the rest of the community.”
– This approach looks at poverty as exclusive where
economic, political, social and cultural factors are
combined
– Being multi-faceted and dynamic, it can draw
attention to causal connections
– It enables one to identify the different structures of
deprivation behind the poverty of specific groups

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Holistic poverty (participatory analysis)

– This approach seeks to capture the

perception of poor people themselves about
their poverty
– Participatory assessments illustrate the multi-
dimensionality of poverty and disadvantage
as poor people experience, rather than as
analysts categorize them
– It can also help eliminate the gender
dimensions of poverty

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Dimensions of gender deprivation include:

• Income: women are paid less than men in

labour
• Time: women’s labour time is not given a
monetary value
• Access to resources: there are wide
gender discrepancies in access to food,
health, education and other basic services
• Social and legal status: institutionalized
discrimination
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 Income Powerlessness Interpersonal
Capability
poverty Voice Poverty Poverty
Poverty
Social Provision
Economic Civic Interpersonal
Integration
(Having a job, a Integration Integration
(Able to access
valued economic (An equal citizen (Strong
services that
function; able to in a democratic social/kinship
correspond to
“pay one’s way’ system) networks)
needs)

Women (especially poor) Immigrants

Long-term unemployed Immigrants
Poor regions Migrant Labour
Low-paid Racial minorities
Geographically isolated Labour mobile
Welfare dependents Indigenous communities
Poor people Widows
Elderly Low-caste Single women
Homeless Homeless
Single women Tribal
Disabled
Disabled Ethnic minorities
Precarious employment Homeless
Asset-poor rural producers
Landless labourers
Urban informal sector
Geographically remote/ isolated

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