It is about poverty and its measurement and including some of data regarding poverty in different province of Nepal.

1. Poverty and its Measurement
Presented by:
Lekha Koirala

2. Poverty Meaning and definition
• Poverty is the deprivation of food shelter money and
clothing when people cant satisfy their basic needs.
Poverty can be understtod simply as a lack of money or
more boardly in terms of barriers to everyday human life.
• Poverty is about not having enough money to meet basic
neds including food, clothing and shelter.
• According to World bank “Poverty is hunger poverty is
lack of shelter. Poverty is being sick and not able to see a
doctor. Poverty is not having access to school and not
knowing how to read. Poverty is not having a job, is for
the future living one day at a time.

3. Poverty Meaning and definition
Borotz and grigsby refer poverty a severe lack of physical
and mental well being closely associated with inadequate
economic resources and consumption( 1971).
Deleeck refer poverty is not restricted to one dimension eg:
income but it manifest itself in all domains of life such as
housing, education, health (1992).
Ashton writes deprivation is surely about essential needs
that are unmet. This may be due to a lack o money
resources but it need not be (since adequate resources
may be misspent). Poverty on the other hand must refer to
the lack of money necessary to meet those needs (1984).

4. Absolute and Relative Poverty
There are two types of poverty:
Absolute poverty :
• It refers to the state of severe deprivation of basic
human needs.
• It is related to level of income needed to fulfill basic
needs.
• It is found in developing countries.
• It can be measure using poverty line.
• It remain consistent over a time.

5. Absolute and Relative Poverty
Relative Poverty
• It is defined contextually as economic inequality in
location or society in which people live.
• It is related to economic status of others in society.
• It is found in developed countries.
• It can be measure using gini coefficient and lorenz
curve.
• It changes over atime.

6. Facts and figure of poverty
• Around 1.29 billion people were in absolute poverty in
2008.
• About 400 million people in absolute poverty in india
and 173 million people in china.
• Around 433 million african are in extreme poverty in
2018.
• Between 1990 and 2010 about 663 million people
moved above the absolute poverty level.
• Every year 11 million children living in poverty die
before their 5th birthday.
• 1.02 billion people go to bed hungry every night.

7. Facts and figure of poverty
• The covid 19 pandemic pushed an additional 97 million
people into extreme poverty in 2021.
• In Nepal 4.9 million people are under poverty which is
17.4% of nepal population in 2021.

8. Status and trends of poverty in Nepal
• In 2019 17.4 percent of nepal population are
multidimensinally poor.
• Across indicator higher number of people are deprive in
housing, materials, clean, cooking ,fuel, years of
schooling, access and nutrition.
• 28 percent of rural are MPI poor compared with 12.3
percent in urban areas.
• 39.5 percent of people in karnali province are
Multidimensionaly poor.
• 25.3 percent in sudurpacchim are Multidimensionally
poor.

9. Status and trends of poverty in Nepal
• Gandaki Province has 9.6 percent people are
muldidimesionally poor.
• Bagmati province has 7.0 percent multidimensinally poor
people.
• However The MPI of nepal is progress from 30.1 percent
to 17.4 percent over the time frame of 5 years.

10. Population below poverty line.

11. Poverty below the poverty line
• Absolute poverty is declining as we compared the data of 1990- 2020.
• Absolute poverty is declined from 49 -18 percent.
• Absolute poverty decline by 20 percent.

12. Lorenz curve
• Lorenz curve is a graphical representation of of the
distribution of income or wealth within a population.
• in economics the lorenz curve is a graphical
representation of the cumulative distribution function of
the empirical probability distribution of wealth it is a graph
showing the proportion of the distribution assumed by yhe
y% of values.
• It is often used to represent income distribution in society.
• Greater the lorenz curve greater will be the relative
degree of inequality.

13. Lorenz curve

14. Gini coefficient
• Gini coefficient is a statistical measure of the degree of
variation represented in a set of values used especially in
analyzing income inequality.
• In economics the gini coefficient is also known as the Gini
index or Gini ratio is a measure of statistical dispersion
intended to represent the income inequality or the wealth
inequality or the consumption inequality within a nation or
a society group.
• For Eg: if everyone has the same income the Gini
coefficient will be zero.

15. Gini coefficient

16. Measurement of poverty:
• There are various measures of the extent of povert
• The head count index
• The poverty Gap
• The squared poverty gap

17. Head count index
• Head count index: By for the most widely used measure is
the headcount index, which simply measures the
proportion of the population that is counted as poor often
denoted by Po
• Po= NP/N
• where
• Np = The number of poor
• N= the total population

18. Virtue
• It is simple to cnstruct
• It is easy to understand

19. Limitation
• It doesnt take intensity of poverty into account.
• it doesnt indicate how poor the people are .
• he poverty estimates should be calculated for individuals
and not households.

20. Poverty Gap index
• Poverty gap index adds up the extent to which individuals
on average fall below the poverty line and expresses it as
a percentage of the poverty line.
P1=1/N∑G1/z
where
G=Poverty line
z=Less actual
Y1= Poor individual

21. Virtue
• It doesnot imply that there is a discontinuity at a poverty
line.

22. Limitation
• This interpretation is only reasonable if the transfer could
be made perfectly efficiently.

23. Squared poverty gap:
• Squared poverty construct a measure of poverty that
takes into account inequality among the poor.
• By squaring the poverty gap index the measure implicity
puts more weight on observations that well below the
poverty line.
P2 = 1/N
where
P2 = Squared poverty gap
y1= Actual income
z= Poverty line

24. Virtue
• It takes into account inquality among poors

25. Limitation
• It lacks intuitive appeal.
• It is not easy to interpret.
• It is not widely used.