The A Blog by Ashirul Amin

2Dec/160

How Poor is “Poor”? For some, having as little as $1.71 for a week’s worth of food.

The Hrishipara Daily Diaries project, run by Stuart Rutherford, tracks monetary transactions of 50 low-income households in Bangladesh on a daily basis. The project started in May 2015 and as of October 2016, has collected ~170,000 records. As always, Stuart is very generous with the data he collects, and shared the entire dataset with me to play with. Datasets like this have a ton of information lending themselves to all kinds of fascinating analysis, but it usually makes sense to do some exploratory work before taking that deep dive. This is the first of hopefully a series of posts that attempt to do do that.

The international poverty line is set at $1.90 (PPP). We can intuitively connect with the fact that it is quite challenging to live off of $1.90 per person, per day. We can perhaps also appreciate the additional challenge posed by income that is not just small, but also uncertain and/or irregular. Yet, such volatile income has to meet the demands for expenses that are much more regular in nature. We'll look at poverty from the expense side in this write-up.

Composition of HH Expenses

The Diaries project contains information on economic outflows, as well as financial ones (e.g. saving), gifts, and transfers. We look only at the economic outflows, and restrict it to consumption related ones, taking out purchases of stock for business, and farm inputs.

expense_distribution

Not surprisingly, food is at the top of the list. It constitutes about half of all transactions by incidence, and a little less than a third in amount. Interestingly, treats and tobacco are about a quarter of the transactions by frequency, though they are only 5% by value. At the other end of the spectrum, only about 1% of the transactions are related to building materials, but they are almost a quarter of all money spent on expenses.

Segmenting the total amount spent per capita, per week, and across poverty levels[1], we get:

expense_by_poverty_level

By value, food expenses are almost half of the expenses of the Extreme Poor HHs. We will look at this in more detail below.

As expected, healthcare and treats/tobacco make up a smaller portion of total expenses with higher income levels, while building, clothing, education and fee expenses make up a larger proportion of total expenses, as income rises.

Composition of Food Expenses

The Diaries contained quite detailed information on what kind of food HHs purchase. Here, we see the frequency of purchase of various items, and the mean and median amounts of those purchases:

food_expenses

Fruits and vegetables seem to be bought most often, at very small amounts. Each purchase is about 10 cents. This is followed y fish, spices and oil. The most expensive purchase seems to be for meat, which makes up a relatively small proportion of food items.

It's quite interesting to see the frequency of purchases:

purchase_frequency

Fruits and vegetables are bought every day, while fish is bought about once a week. The staple, rice, is bought every two weeks, with spices, oil and eggs/dairy showing the same frequency. Spending on meat is a rare occurrence, happening less than once a month on average across all HHs, and spending on poultry is even rarer.

Let's break down this frequency table and see if there is a difference in frequency of purchases by poverty level:

frequency_by_poverty

Poorer HHs seem to purchase rice and cooking oil more frequently than less poor ones. This is possibly because the Extreme and Very Poor do not have enough income to purchase any more than a week's worth of rice. Purchase of fruits and vegetables is an almost daily occurrence across the board, given their perishable nature. Generally speaking, the purchase frequency patterns are not that different between the Very, Moderate and Near poor for most items, even though they are quite different to those of the Extreme Poor.

The amount spend on each of these food items is also telling:

food_expenses_per_person_per_week

Two particular observations jump out here:

  • The Extreme Poor spend more on rice in both absolute and relative terms compared to the other three poverty levels. This is because rice is relatively cheaper compared to vegetables, fish and meat, providing the necessary calorific intake without breaking the bank. This is consistent with the widespread mental image of a destitute individual having rice, chili and salt as the entire meal.
  • The food expenses per person are actually lower for the Moderate Poor compared to the Very Poor. The poverty levels were assigned based on income, and this seems to suggest that while a bunch of the Moderate Poor HHs have higher absolute income, it does not translate to an expanded diet.

Perhaps the most important observation though is how incredibly small the food budget was for the Extreme Poor - they spent Tk. ~137 ($1.71) on food in an entire week. That's about 25 cents a day. We talk about the poor and their challenging lives, but this really puts the fragility of their predicament in perspective. And helps illustrates why food security is such a big deal.

Caveat and More

One thing to keep in mind while looking at these numbers is the small sample size - 50 HHs. That is not large enough for any statistically rigorous analysis, and we best consider the results indicative.

Stuart had two very important observations on this analysis, which I am reproducing verbatim:

  1. "Some of the youngsters working away from home and sending money back to homes in the villages get board and lodging where they work. This reduces what they spend on food, and we have no records of how much of the money they send home is spent on food. Some of these cases are among the extreme poor group and this tends to reduce the apparent food spending of that group."
  2. "Some households do some farming work, and some of them eat some of what they produce: so their food purchases are also a bit reduced. They are mostly, but no exclusively, among the less poor groups."

I encourage you to check out the blogs at The University of Manchester's Global Development Institute here, here and here. A detailed list of other publications can be found here.

 

[1] Using Bangladesh's official poverty lines, the Diaries project categorizes 11 HHs with incomes that fall below the Lower National Poverty Line of Tk. 61.65 per person per day as "extreme poor,"  9 HHs with incomes that fall below the Upper Poverty Line of Tk. 75.64 as "very poor," 10 HHs with daily per person incomes of up to double the Upper Poverty Line as "moderately poor," and the remaining 20 HHs as "near poor."

Posted by A. Amin

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