OPHIOxford Poverty & Human Development InitiativeDepartment of International DevelopmentQueen Elizabeth House, University of Oxford www.ophi.org.uk

Multidimensional Measurement of Poverty

16 June 2008

Bhutan: Overview

Bhutan: Basic Facts• 17th Century: Emerged as a country.

• Monarchy until 2008 when the first elections were held, fostered by the last three kings. They have finally become a constitutional monarchy.

• Gross National Happiness vs. Gross National Product. However, it is a fast growing country: 2000: 7.2% and 2006: 8.5%.

Bhutan: Dataset

• 2007 Bhutan Living Standard Survey

(National Statistics Bureau-NSB):

-9798 households, representing 125,491

-49165 people, representing 630,000

• Unit of Analysis: Household. All members of a household identified as poor are considered poor.

Objective

• The NSB estimates income poverty (they use the FGT class: incidence (HCR), intensity (PGR) and severity (SPGR).

• Q/ How do figures change when we move from income poverty to multidimensional poverty?

Selected Indicators & Deprivation Cutoffs

Indicator Deprivation Cutoff

INCOMEBhutan Food Poverty Line (Nu 407.98 pc p/month)Bhutan Poverty Line (Nu 1,096.94 pc p/month)

LITERACYNone of the household members is literate (Basu & Foster, 1998)

ROOM AVAILABILITY

More than 3 persons per room (MDG).

ELECTRICITY Not having access to electricity.

DRINKING WATER Not having any of these: pipe in dwelling, neighbour’s pipe, public outdoor tap or protected well. (MDG)

SANITATION Not having flush toilet or pit latrine. (MDG).

Results with Equal Weights:

Each Indicator counts with wi=1

% of People Deprived in Each Indicator

Indicator Number of

Deprived in…

H

Subsistence Income 37,329 5.9

Income 146,100 23.2

Literacy 53,803 8.5

Room Availability 302,803 48.1

Electricity 188,590 29.9

Drinking Water 57,457 9.1

Improved Sanitation

23,006 3.6

Rural vs. Urban: Contribution to overall H

by each Indicator

Rural Pop. Share: 74% - Urban Pop. Share: 26%

0%10%20%30%40%50%60%70%80%90%

100%

Inco

me

Litera

cy

People

per

Room

Drinki

ng Wat

er

Elect

ricity

Santit

atio

n

Indicator

% C

on

trib

uti

on

UrbanRural

H and Mo for different k values

k

Number of

HH Poor in

k or more…

H Mo A

On average

poor in…

1 409,585 0.65 0.20 0.31 1.8

2 224,033 0.36 0.15 0.42 2.5

3 105,417 0.17 0.09 0.53 3.2

4 28,237 0.04 0.03 0.75 4.5

5 4,290 0.007 0.006 0.86 5.2

6 197 0.0003 0.0003 1 6

Income H=23.2%

Rural vs. Urban: Contribution to overall

Mo for different k

Rural Pop. Share: 74% - Urban Pop. Share: 26%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1 2 3 4 5 6

k

% C

on

trib

uti

on

Urban

Rural

Bhutan’s 20 Districts

Selected Rank Changes:Income Poverty vs.

Multidimensional PovertyDistrict Income

H

Income

Rank

(Ascending)

M0

k=2

M0

Rank

(Ascending)

Rank Change

(H Income- M0)

Thimpu 0.024 1 0.089 5 -4

Gasa 0.041 3 0.231 14 -11

Chhukha 0.203 11 0.142 6 5

Lhuntse 0.430 17 0.210 9 8

Why the changes?

Gasa Lhuntse

Variable H by Indicator %Contrib H by Indicator %Contrib

Income 0.041 3% 0.478 23%

Literacy 0.138 10% 0.270 13%

Room Availability 0.339 25% 0.482 23%

Electricity 0.454 33% 0.485 23%

Drinking Water 0.411 30% 0.216 10%

Improved Sanitation 0.002 0 0.176 8%

M0 0.231 100 0.210 100

Composition of Multidimensional Poverty in Two Districts - Mo with k=2

0%10%20%30%40%50%60%70%80%90%

100%

Gasa LhuntseDistrict

% C

on

trib

uti

on

of

Ea

ch

In

dic

ato

r

Income Literacy People per Room

Drinking Water Electricity Santitation

Final Thoughts• Income deprivation does not tell the whole story

about deprivation in Bhutan. Ranking districts by income poverty can hide serious deprivation in many other indicators.

• Room Availability, Access to Electricity, Access to Drinking Water: high deprivation in many areas.

• Rural Areas are the ones that contribute most both to income and multidimensional poverty.

Additional Slides (If required for the discussion)

Rural vs. Urban: H by Indicator

Indicator H

Rural

%

Contrib

H

Urban

%

Contrib

H

Bhutan

Subsistence Income 8 100% 0.16 0% 5.9

Income 30.9 98% 1.7 2% 23.2

Literacy 10.3 90% 3.5 10% 8.5

Room Availability 52.5 81% 35.8 19% 48.1

Electricity 40.3 99% 1.15 1% 29.9

Drinking Water 12.2 99% 0.5 1% 9.1

Improved Sanitation

4.6 92% 1.1 8% 3.6

Rural Pop. Share=74% - Urban Pop. Share=26%

Rural vs. Urban: M0 with different k

K M0

Rural

%

Contrib

M0

Urban

%

Contrib

M0

Bhutan

1 0.251 91% 0.07 9% 0.205

2 0.206 97.5% 0.015 2.5% 0.156

3 0.125 99.4% 0.002 0.6% 0.093

4 0.042 99.9% 0.0001 0.1% 0.031

5 0.008 100% 0 0 0.006

6 0.0004 100% 0 0 0.0003

Rural Pop Share=74% - Urban Pop Share=26%