Measuring Poverty: Which Approach Should Africa Take?

Below is the translated English version of this week's Southern Voices blog post, written by Dr. Ibrahim Diarra.

Poverty can be defined as a situation in which one notices the absence of sufficient resources to live with dignity.  In other terms, it describes the lack of material resources that impacts the access to the following basic human needs: food, drinkable water, clothing, and shelter.  In addition, this definition extends to the lack of intangible resources such as access to education, participation in rewarding activities, respect received from other people, and personal development.  There is a marked supremacy of measuring poverty in terms of monetary measures, notably in Africa where other factors are also important.  Although it is true that monetary measurements allow international comparisons, they could involve bias, given the multidimensional nature of poverty.  That is why it is important to consider other methods to evaluate poverty.

One of the concerns raised by these other definitions of poverty, shared almost universally, is that they do not take into account the opinion of economic agents for whom this measure is established.  This begs the following questions: how can one be sure that the populations which are classified as impoverished are familiar with these criteria and consider them valid?  This comes down to whether or not we can establish a 'state of poverty' through economic terms without assuring that it was intentional.  Are we sure that the rural population, where there is no electricity or access to television, consider themselves poor?  These questions challenge us as African researchers on the necessity to study the tools and methodologies used to identify impoverished people.  This contribution will focus on three approaches: financial, relative deprivation, and heritage.
Financial approach to poverty

The threshold of economic poverty is determined by household or individual income.  When there is faulty information about income, consumption expenses are used as a substitute.  This approach poses a problem in that it supposes that the purchasing behavior of the consumer is always proportional to his or her level of income.  Consequently, one such indicator could classify high-income individuals who spend very little as impoverished.

Additionally, it does not seem pertinent to continue to make international comparisons without using the same variables everywhere.  The consumption expenses only reflect the household propensity to consume, not their ability to acquire goods and services.  That is why it is necessary to implement measurements that effectively capture the income of populations in African countries, similar to numerous developed countries, and not make approximations based upon consumer expenses.

Relative deprivation approach to poverty

This measure of poverty focuses on the access of populations to basic social services and to a certain level of comfort.  More precisely, it involves access to education, health care, drinkable water, and comfortable housing.

While adequate infrastructure exists in developed countries, this is not always the case in many African countries. This is particularly true in the rural sector where there is a lack of availability of these types of infrastructure.  Essentially, households are deprived of health care or education because the health facility or school do not exist or are located too far away.  One could say that this is involuntary impoverishment.  This situation was described in a study conducted by Diarra and Kouma in 2009 in which they researched the core of poverty in the rural agricultural sector of Cote d'Ivoire.  It was concluded from their results (expanding upon those given from the ENV in 2002) that there are more poor people when the relative deprivation method is utilized (69.3%) than when the economic method is used (50.5%) in the rural agricultural sector of Cote d'Ivoire in 2002.

Heritage approach to poverty

Patrimonial poverty is measured through a complex indicator that looks at the presence or lack of assets and heirlooms.  In the analysis of rural populations, households often have assets that are not always recognized but whose value could allow them to obtain revenue that would contribute to the improvement of their well-being.  The underpinning intention of this approach is to accurately capture what households possess.  Thus, in the case of financial difficulty, it will be possible to transform these assets into money to eventually acquire indispensable goods and services to satisfy their vital needs.

Diarra and Kouma's study shows that through this method, 22% of households are impoverished, a much lower figure than those found through economic poverty (50.5%) and poverty through relative deprivation (69.3%).  One of the observations of these authors is that economic rationality is not always relevant in the rural sector where there is an emphasis on social considerations.  In effect, they determine that, despite the possession of assets, these populations do not actively pursue the transformation of their heirlooms into monetary revenue, especially to satisfy their needs – even hunger.  This information supports the idea that the measurement of poverty through assets could be an approximation of the economic method, as Sahn and Stifel showed in their study in 2003.

One explanation resides in the fact that destocking part of one's family assets is perceived in these rural African communities as a loss of social status in the society.  These assets are mostly used during joyful or sorrowful events (marriages, baptisms, funerals, etc.) which are occasions to affirm their social position in the community.

Which approach is most appropriate?

In regard to these different observations, we are convinced that the phenomenon of poverty which comprises many dimensions cannot be ascertained by a single measure.  This position is defended by several authors who consider poverty as a multifaceted issue and which must develop measurements that encompass this multidimensionality.  According to Bibi and El Lahga, since the beginning of the 1990s, the findings about characteristics apart from income are more and more available.  The multidimensional approach is becoming recommended more than ever in order to better understand the performance of a given country in the fight against poverty in these diverse aspects.  The conclusions of a team of experts, directed by Joseph Stiglitz by the request of the former French President Nicolas Sarkozy in February 2008, places an emphasis on the use of this measurement, but also adding complementary measures to consider the multifaceted nature of poverty.

To grasp the nature of poverty in Africa, it seems to be important to favor the multidimensional approach.  However, for a better measure of income poverty that remains valid, it is suitable to put mechanisms in place which allow access to reliable information on household income.  It is up to the African researchers to identify the appropriate tools to measure the phenomenon of poverty in Africa.  In this exercise, it will be necessary to involve all of the social strata in order to discover a definition of poverty that considers the perception of different factors of society and the true realities of the continent.

Dr. Ibrahim Diarra is a rural economist and lecturer at the Unity of Training, Economic Science Research, and Management as well as the Director of the Center of Economic and Social Research of Cote d'Ivoire.

Translated from French by Allie Stauss, Staff Intern for the Africa Program and the Project on Leadership and Building State Capacity at the Wilson Center.

Photo attributed to the Gates Foundation via Flickr Commons.