HOUSEHOLD INCOME AND

EXPENDITURE SURVEY (HIES) 2010

CHAPTER 6
MEASUREMENT OF POVERTY
HOUSEHOLD INCOME AND
EXPENDITURE SURVEY (HIES) 2010
CHAPTER 6
MEASUREMENT OF POVERTY
MD. NADIM RAHMAN ID: 13169002
MDP 621: Poverty, Livelihood, Food and
Nutrition Security
Measurement Method
Cost of Basic Needs (CBN) Used by Bangladesh Bureau of
Statistics since 1995-96
Food poverty line:
Lower Poverty Line - The extreme poor households are those
households whose total expenditures on food and nonfood
combined are equal to or less than the food poverty line.
Upper Poverty Line - The moderate poor households are those
households whose total expenditures are equal to or less than
the upper poverty line.
Cost of Basic Needs (CBN) Used by Bangladesh Bureau of
Statistics since 1995-96
Food poverty line:
Lower Poverty Line - The extreme poor households are those
households whose total expenditures on food and nonfood
combined are equal to or less than the food poverty line.
Upper Poverty Line - The moderate poor households are those
households whose total expenditures are equal to or less than
the upper poverty line.
Poverty Incidence (Overall)
Steeply Declining incidence of poverty
between 2005 and 2010
Upper Poverty Line from 40% to 31.5% national rate.
Poverty reduced by 8.5% at national level.
Poverty alleviation in the rural areas was speedier than in the
urban areas.
In about 20 years since 1991-92, the country's poverty level
dropped by 25.2% points.
Bangladesh is close to achieving the millennium development
goal (MDG) about halving the poverty incidence by 2015
Upper Poverty
line
2005 2010 Difference
Rural 43.8% 35.2% 8.6%
Upper Poverty Line from 40% to 31.5% national rate.
Poverty reduced by 8.5% at national level.
Poverty alleviation in the rural areas was speedier than in the
urban areas.
In about 20 years since 1991-92, the country's poverty level
dropped by 25.2% points.
Bangladesh is close to achieving the millennium development
goal (MDG) about halving the poverty incidence by 2015
Rural 43.8% 35.2% 8.6%
Urban 28.4% 21.3% 7.1%
Steeply Declining incidence of poverty
between 2005 and 2010
Lower Poverty Line from 25.1% to 17.6% national rate.
Poverty level dropped by 17.6% points and now it is less than
half than it was in 1991-1992
Bangladesh already achieved the MDG target of reducing the
incidence of extreme poverty by half by 2015.
Lower
Poverty line
2005 2010 Difference
Rural 28.6% 21.1% 8.5%
Urban 14.6% 7.7% 7.5%
Lower Poverty Line from 25.1% to 17.6% national rate.
Poverty level dropped by 17.6% points and now it is less than
half than it was in 1991-1992
Bangladesh already achieved the MDG target of reducing the
incidence of extreme poverty by half by 2015.
Urban 14.6% 7.7% 7.5%
Poverty incidence by Divisions
Significant Reduction of Poverty in
Divisions
Lowest poverty rate recorded in Chittagong division at 26.2%
and highest in Rangpur division at 46.2% (upper poverty line)
The sharp reduction of poverty rate in Chittagong division
using the upper poverty line may be attributed to its high
reduction in urban area (11.8%) during the period.
The urban HCR of poverty in Chittangang division came down
to 39.0% in 2005 from 55.9% in 2000, a reduction of 16.9%
points during the period.
The reduction of HCR of poverty is significant in urban areas
of other divisions as well.
Lowest poverty rate recorded in Chittagong division at 26.2%
and highest in Rangpur division at 46.2% (upper poverty line)
The sharp reduction of poverty rate in Chittagong division
using the upper poverty line may be attributed to its high
reduction in urban area (11.8%) during the period.
The urban HCR of poverty in Chittangang division came down
to 39.0% in 2005 from 55.9% in 2000, a reduction of 16.9%
points during the period.
The reduction of HCR of poverty is significant in urban areas
of other divisions as well.
Poverty incidence by PG and SPG
Poverty Gap (PG) and Squared
Poverty Gap (SPG)
The Poverty Gap (PG), which estimates the depth of poverty
of a country's population, is estimated at 3.1% at the national
level. It has reduced by 1.5% points since 2005.
The reductions of PG indicate that the average consumption
level of the people living below the poverty lines improved
during the period 2005 to 2010.
Lowest gap in Chittagong division at 2.2% and highest gap in
Barisal division at 5.4%. The gap has decreased for the
remaining divisions as well.
The Squared Poverty Gap (SPG), which measures the severity
of the poverty, estimated at 0.8% at the national level. It has
reduced by 0.5% since 2005. This indicates that the severity of
poverty has reduced during the period 2005 to 2010
The Poverty Gap (PG), which estimates the depth of poverty
of a country's population, is estimated at 3.1% at the national
level. It has reduced by 1.5% points since 2005.
The reductions of PG indicate that the average consumption
level of the people living below the poverty lines improved
during the period 2005 to 2010.
Lowest gap in Chittagong division at 2.2% and highest gap in
Barisal division at 5.4%. The gap has decreased for the
remaining divisions as well.
The Squared Poverty Gap (SPG), which measures the severity
of the poverty, estimated at 0.8% at the national level. It has
reduced by 0.5% since 2005. This indicates that the severity of
poverty has reduced during the period 2005 to 2010
Poverty incidence by Household Size
Poverty Reduction by Household Size
The lowest HCR is 7.5% at the national level for households
having number of household members 1-2 which corresponds
to 9.3% in rural area and 2.8% in urban area.
Improvement of HCR of this size of family observed all over
the country.
HCR of poverty using lower poverty line is the highest for the
family size 7-8 which is recorded at 28.2% which was 29.9%
in 2005.
It appears that HCR increases with the increase of household
size up to member size 7-8 and starts falling afterwards as
household size increases.
The lowest HCR is 7.5% at the national level for households
having number of household members 1-2 which corresponds
to 9.3% in rural area and 2.8% in urban area.
Improvement of HCR of this size of family observed all over
the country.
HCR of poverty using lower poverty line is the highest for the
family size 7-8 which is recorded at 28.2% which was 29.9%
in 2005.
It appears that HCR increases with the increase of household
size up to member size 7-8 and starts falling afterwards as
household size increases.
Poverty incidence by Age of Household
Head
Poverty Reduction by Age of
Household Head
Shows similar pattern in 2010 and 2005 both for the lower
and upper poverty lines.
At the beginning, the HCR increases for the age <=29 to 30-
39 of head and then falls for the subsequent age groups.
The lowest HCR of poverty is found for the head of age group
60+. This reflects the existence of more earners in the large
family.
Shows similar pattern in 2010 and 2005 both for the lower
and upper poverty lines.
At the beginning, the HCR increases for the age <=29 to 30-
39 of head and then falls for the subsequent age groups.
The lowest HCR of poverty is found for the head of age group
60+. This reflects the existence of more earners in the large
family.
Poverty incidence by Selected
Household Characteristics
Poverty Reduction by Selected
Household Characteristics
The HCR of incidence of poverty by sex of head of household
is estimated at 26.6% for the female headed households
whereas it is 32.1% for male headed ones.
The HCR of incidence of poverty is found significantly less for
female headed households than that of male headed
households.
HCR of incidence of poverty by marital status using the upper
poverty line is 31.4% for the married, 23.3% for the
unmarried and 33.9% for the widowed/divorced persons.
The HCR of poverty reduced for all these categories during
the period 2005 to 2010.
Using the upper poverty line, the HCR was 31.6% for the
Muslims and 31.1% for the non-Muslims in 2010.
The HCR of incidence of poverty by sex of head of household
is estimated at 26.6% for the female headed households
whereas it is 32.1% for male headed ones.
The HCR of incidence of poverty is found significantly less for
female headed households than that of male headed
households.
HCR of incidence of poverty by marital status using the upper
poverty line is 31.4% for the married, 23.3% for the
unmarried and 33.9% for the widowed/divorced persons.
The HCR of poverty reduced for all these categories during
the period 2005 to 2010.
Using the upper poverty line, the HCR was 31.6% for the
Muslims and 31.1% for the non-Muslims in 2010.
Poverty incidence by Education
Poverty Reduction by Education
Traditionally, incidence of poverty is high among the illiterates.
The 2010 survey findings reveal similar results. In 2010, the
estimates of HCR poverty by literacy status using the upper
poverty line are 42.8% for the illiterates and 19.0% for the
literates. It is 23.8% points higher among the illiterates than
among the literates. Significant poverty reduction observed
among the illiterates during the period 2005 to 2010.
The HCR of incidence of poverty by educational status
shows a high negative correlation with educational status.
Poverty incidence decreases as educational status increases.
The estimates show that HCR using the upper poverty line is
42.8% for no education, 35.7% for grade I-IV, 22.6% for
grade V-IX and 7.5% for SSC and above.
Traditionally, incidence of poverty is high among the illiterates.
The 2010 survey findings reveal similar results. In 2010, the
estimates of HCR poverty by literacy status using the upper
poverty line are 42.8% for the illiterates and 19.0% for the
literates. It is 23.8% points higher among the illiterates than
among the literates. Significant poverty reduction observed
among the illiterates during the period 2005 to 2010.
The HCR of incidence of poverty by educational status
shows a high negative correlation with educational status.
Poverty incidence decreases as educational status increases.
The estimates show that HCR using the upper poverty line is
42.8% for no education, 35.7% for grade I-IV, 22.6% for
grade V-IX and 7.5% for SSC and above.
Poverty Reduction by Main Occupation of
the Heads of Households and Residence
Poverty incidence by Land-holding
Poverty Reduction by Land-holding
Traditionally, the poor have less land to support their families.
There exists strong negative correlation between land
ownership and incidence of poverty. That is, as land size
increases, the incidence of poverty decreases. Bangladesh still
has an agriculture- dominant economy where about 48 percent
of the people live on agriculture.
The HCR of the landless households is lower than the small land
owners mainly due to their involvement in non-agricultural
activities which provides them with income enough to escape
poverty through engaging in various non-farm economic
activities.
Traditionally, the poor have less land to support their families.
There exists strong negative correlation between land
ownership and incidence of poverty. That is, as land size
increases, the incidence of poverty decreases. Bangladesh still
has an agriculture- dominant economy where about 48 percent
of the people live on agriculture.
The HCR of the landless households is lower than the small land
owners mainly due to their involvement in non-agricultural
activities which provides them with income enough to escape
poverty through engaging in various non-farm economic
activities.
Poverty incidence by Per Capita
Income of the Poor
Poverty Reduction by Per-capita
income of the Poor
Using the lower poverty line, per capita income of the poor in
nominal terms at the national level is Tk. 1102.84 at national
level, Tk. 1083.72 in the rural area and Tk. 1250.18 in the
urban area in 2010. On average, the per capita income of the
poor increased nearly 74% in 2010 over that in 2005
Per capita income of the poor is at the highest level in Dhaka
division at Tk 1159.30 and at the lowest level in Sylhet division
at Tk 996.95
Using the lower poverty line, per capita income of the poor in
nominal terms at the national level is Tk. 1102.84 at national
level, Tk. 1083.72 in the rural area and Tk. 1250.18 in the
urban area in 2010. On average, the per capita income of the
poor increased nearly 74% in 2010 over that in 2005
Per capita income of the poor is at the highest level in Dhaka
division at Tk 1159.30 and at the lowest level in Sylhet division
at Tk 996.95
Poverty incidence by Per Capita
Expenditure of the Poor
Poverty Reduction by Per-capita
Expenditure of the Poor
Per capita expenditure of the poor is Tk 1245.76 at the
national level, Tk 1200.02 in the rural areas and Tk 1457.65
in the urban areas. It recorded an average increase of nearly
85% in 2010 over the 2005 national level.
Chittagong division recorded the highest per capita
expenditure with Tk 1174.50 and Rangpur division recorded
the lowest with Tk 1027.07
Though per capita expenditure increased more than per
capita income which indicates higher cost of living. Factors
involved are price hike, unjust profit making by middlemen,
corruption, political unrest, increased transportation cost,
increase of fuel and power cost, reduced residential land etc.
Per capita expenditure of the poor is Tk 1245.76 at the
national level, Tk 1200.02 in the rural areas and Tk 1457.65
in the urban areas. It recorded an average increase of nearly
85% in 2010 over the 2005 national level.
Chittagong division recorded the highest per capita
expenditure with Tk 1174.50 and Rangpur division recorded
the lowest with Tk 1027.07
Though per capita expenditure increased more than per
capita income which indicates higher cost of living. Factors
involved are price hike, unjust profit making by middlemen,
corruption, political unrest, increased transportation cost,
increase of fuel and power cost, reduced residential land etc.
Factors of Bangladeshs Enhanced
Growth and Declining Poverty
Rapid growth in garments exports and growth in manufacturing
activities
Relatively higher paying rural non-farm opportunities
increased
Labour force slowly began to shift away from agriculture
Declining population growth rates (1.579% - 2012 est.),
improved human capital.
Increased access to microfinance loans
Rapid growth in garments exports and growth in manufacturing
activities
Relatively higher paying rural non-farm opportunities
increased
Labour force slowly began to shift away from agriculture
Declining population growth rates (1.579% - 2012 est.),
improved human capital.
Increased access to microfinance loans
Factors of Bangladeshs Enhanced
Growth and Declining Poverty
Improved infrastructure mainly in the form of more extensive
road communications networks
Increased foreign remittance earnings
Substantial improvements in living conditionsincluding housing
characteristics, and access to sanitation facilities, electricity,
and communications.
The poor in Bangladesh are more likely to belong to
households with a larger number of dependents, lower
education among household members, and with the household
head engaged in daily wage labour.
Improved infrastructure mainly in the form of more extensive
road communications networks
Increased foreign remittance earnings
Substantial improvements in living conditionsincluding housing
characteristics, and access to sanitation facilities, electricity,
and communications.
The poor in Bangladesh are more likely to belong to
households with a larger number of dependents, lower
education among household members, and with the household
head engaged in daily wage labour.
Observation
Poverty has been decreasing gradually in the country keeping
pace with the increasing growth of per head national income
Bangladesh has reduced poverty levels and improved living
standards significantly in recent years despite global economic
meltdown and natural calamities
The main objective of the present government is to alleviate
poverty and establish equity. The poverty reduction rate will
help achieve the other objectives of the Millennium
Development Goals (MGDs) by 2015.
Poverty has been decreasing gradually in the country keeping
pace with the increasing growth of per head national income
Bangladesh has reduced poverty levels and improved living
standards significantly in recent years despite global economic
meltdown and natural calamities
The main objective of the present government is to alleviate
poverty and establish equity. The poverty reduction rate will
help achieve the other objectives of the Millennium
Development Goals (MGDs) by 2015.
Observation
Poor households are also more likely to be landless or
functionally landless and less likely to receive domestic or
foreign remittances.
In the proposed perspective plan 2021, the government is
committed to cutting extreme poverty to 10% and achieving
double-digit GDP growth by 2021, the final year of its
implementation period.
Based on the perspective plan, the government is also framing
the sixth five year development plan to achieve the targets of
the double-digit growth, develop the country's weak
infrastructure and cut hunger and eliminate disparity.
Poor households are also more likely to be landless or
functionally landless and less likely to receive domestic or
foreign remittances.
In the proposed perspective plan 2021, the government is
committed to cutting extreme poverty to 10% and achieving
double-digit GDP growth by 2021, the final year of its
implementation period.
Based on the perspective plan, the government is also framing
the sixth five year development plan to achieve the targets of
the double-digit growth, develop the country's weak
infrastructure and cut hunger and eliminate disparity.
Observation
Households geographical location has a strong influence on its
economic status.
As education appears to play an important role in increasing
urban inequality, raising the level of general education is
essential.
In addition to raising general educational level, it is necessary
to provide primary education throughout the country in order
to mitigate poverty.
It is imperative to raise agricultural productivity in both rural
and urban sectors.
Non-agricultural activities should be promoted according to the
pattern of comparative advantages.
Households geographical location has a strong influence on its
economic status.
As education appears to play an important role in increasing
urban inequality, raising the level of general education is
essential.
In addition to raising general educational level, it is necessary
to provide primary education throughout the country in order
to mitigate poverty.
It is imperative to raise agricultural productivity in both rural
and urban sectors.
Non-agricultural activities should be promoted according to the
pattern of comparative advantages.
Thank You