between 2002/3 and 2007/8? East Asia and Pacific Region The World Bank November 2009

Transcription

1 DidPoverty ReallyStagnateinMongolia between 2002/3 and 2007/8? An Exploration of the Data East Asia and Pacific Region The World Bank November 2009

2 Outline Puzzleof no poverty reduction Possible explanations Approaches to measure poverty trends (consumption based) Trends in non consumption measures of welfare 22

3 NSO report finds almost no poverty reduction in Mongolia 2002/3 2007/82007/8 2002/ /08 Poverty Poverty Headcount Gap Severity Headcount Gap Severity National Urban Rural Source: HIES/LSMS 2002/03 and HSES 2007/08. 33

4 Finding of no poverty reduction is puzzling because 1. Growth Mongolia GDP per capita (in 2005 Tugrug) Annual growth in GDPpc between 4 and 9% Cross-country empirical evidence shows negative relationship between poverty rate and growth 4

5 2. Rising number of livestock 20,000.0 Number of livestock in Mongolia by species 15, , ,000.0 Horse Cattle Sheep Goat

6 And rising commodity prices Meat 200 Real price of beef fin Mongolia

7 Rising commodity prices Wool Real price of wool

8 3. And real consumption has almost doubled over this period Average Monthly Real Consumption by region in /8 Tugrugs overall urban rural 2002/3 2007/8 Note: Consumption aggregates g are constructed consistently across the two rounds 8

9 What are possible reasons for finding no poverty reduction? Growth but Gini from 0.33 to 0.36 increased BUT growth in low inequality quintiles Average Monthly Real Consumption by quintile in 2007/8 Tugrugs Poorest 2nd 3rd 4th Richest 2002/3 2007/8

10 What are possible reasons for finding no poverty reduction? Growth but Gini from 0.33 to 0.36 increased BUT growth in low inequality quintiles Growth but higher h inflation i Taking into account inflation, real consumption still increased

11 What are possible reasons for finding no poverty reduction? Growth but Gini from 0.33 to 0.36 increased BUT growth in low inequality quintiles Growth but higher h inflation i The way poverty is measured Taking into account inflation, real consumption still increased Consumption aggregate Poverty y line!

12 How to update poverty lines? 2 methods Method 1: Inflate poverty line using consumer price index (constant real poverty line) 1 Poverty rate 0 povl line cdf 12

13 How to update poverty lines? 2 methods 1 2 povlines cdf Method 2: Recalculate poverty line Poverty rate 0 13

14 How to update poverty lines? (+) ( ) Method 1: Inflate poverty line using consumer price index (constant real poverty line) Gives comparable poverty lines Not relevant when there is a case for changing poverty benchmark Method 2: Recalculate poverty line 14 May be useful over long term or when survey design changes significantly Not allow discussion of trend, not for short period

15 Method 1 is common international practice since able to discuss trends Method 1: Inflate poverty line using consumer price index (constant real poverty line) Apply this method to Mongolia 15

16 Method 1 can be implemented in 2 ways First way: Take poverty line as given and inflate forward to a revised 2007 poverty line 0 povl line cdf 1616

17 Method 1 can be implemented in 2 ways Second way: take 2007 poverty line as given and deflate backward to a revised 2002 poverty line 1 cdf

18 Take 2002 poverty line as given and inflate forward to a revised 2007 poverty line Table 1: Maintain i NSO's poverty line of 2002/3 Poverty line (Tugrug Poverty headcount per cap per month) (%) 2002/3 2007/8 2002/3 2007/8 Urban Recalculated Rural povline =24743*cpi Total growth Inflation Urban adjusted Rural povline Total

19 Take 2002 poverty line as given and inflate forward to a revised 2007 poverty line Tbl Table 1: Maintain Mi ti NSO's poverty line of 2002/3 Poverty line (Tugrug per cap per month) Poverty headcount (%) 2002/3 2007/8 2002/3 2007/8 Urban Recalculated Rural povline Total Inflation Urban adjusted povline Rural Total

20 Or take 2007 poverty line as given and deflate backward dto a revised d2002 poverty line Tbl Table 2: Maintain Mi ti NSO's poverty line of 2007/8 Poverty line (Tugrug Poverty headcount per cap per month) (%) 2002/3 2007/8 2002/3 2007/8 Urban Recalculated Rural povline Total =62494/cpi Inflation Urban growth adjusted Rural povline Total

21 Or take 2007 poverty line as given and deflate backward dto a revised d2002 poverty line Table 2: Maintain NSO's poverty line of 2007/8 Poverty line (Tugrug per cap per month) Poverty headcount (%) 2002/3 2007/8 2002/3 2007/8 Urban Recalculated Rural povline Total Inflation Urban adjusted Rural povline Total

22 Method 1 is common international practice since able to discuss trends Method 1: Inflate poverty line using consumer price index (constant real poverty line) Poverty has declined d substantially 22

23 Is this poverty reduction consistent with other measures of well being?

24 Welfare proxies other than consumption based also point ttoward social ilprogress Livestock size increased Real consumption increased Real price of wool increased Consistent with poverty reduction Real GDP growth Access to savings increased Education, health indicators improved Access to some basic infrastructure improved 24

25 Livestock size increased significantly Livestock headcount (bods) Urban Rural Total Livestock Headcount (Bods) Rural Only Nu umber Poorest 2nd 3rd 4th Richest Per Capita Consumption Quintiles Rural

26 Access to savings increased significantly 30.0 % Households with Savings Account Urban Rural Total % Households with Savings Account by quintile Poorest 2nd 3rd 4th Richest

27 Education attainment slightly improves % Household heads with at least secondary education Urban Rural Total % Household heads with at least secondary education by quintile Poorest 2nd 3rd 4th Richest

28 Illness incidence decreases among rural, poor 8.0 Illness incidence (% individuals reporting health problem last month) Urban Rural Total Illness incidence (% individuals reporting health problem last month) by quintile Poorest 2nd 3rd 4th Richest

29 Access to solar energy improved % Households with solar energy Urban Rural Total % Households with solar energy by quintile Poorest 2nd 3rd 4th Richest

30 Access to telecommunication improved % Households with landline/mobile telephone Urban Rural Total % Households with landline/mobile telephone by quintile Poorest 2nd 3rd 4th Richest

31 Sanitation improved in rural, but worsened in urban Overall Urban % Households with waste disposal Urban Rural Total / /08 %Hh with Waste Disposal Ger Apartment House

32 POVERTY HAS DECLINED 32

33 THANK YOU! 3333

34 World Bank Poverty Analysis Work Plan Policy note #1: poverty profile 2002/3 2007/8 2007/8 Policy note #2: Impact of financial crisis Policy note #3 : Social safety nets Policy note #4: Migration Others???? 34

35 Appendix: Poverty rate if use NSO s line and WB s cpi dfl deflation to Headcount Rate(P0) Mongolia 2002/03 Mongolia 2007/08 Urban Rural Total Strata Capital city Aimag center Soum center Rural Headcount Rate(P0) Mongolia 2002/03 Mongolia 2007/08 Capital city Ger Apartment Detached house Aimag center Ger Apartment Detached house Soum center Ger Apartment 20.9 Detached house Rural Ger Apartment 24.7 Detached house 52.4

36 Internal migration: changes in population share Ulanbaatar Aimag Center Soum Center Countryside Dwelling 2002/ / / / / / / /2008 Ger Apartment House Other Total 100% 100% 100% 100% 100% 100% 100% 100% 3636

37 Constructing a nutrition based poverty line FOOD Reference group For food(e.g. bottom 40%) NON-FOOD Hh around food povline (upper/lower) Caloric equivalence of ref. group s food bundle Food and non food shares (Engel curve) + = Food povline = cost Non food povline of food bundle at 2100 cal/cap/day =non food POV LINE consumption 3737