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Stata in the measurement and analysis of poverty

in Mexico2009 Mexican Stata Users Group Meeting

April 2009, Mexico city

Creation of CONEVAL

General Law of Social Development (January 2004)

Object of the Law:“To guarantee the total exercise of the

social rights established in the Political Constitution of Mexico ”

Article 81: Establishes the creation of the Council

Income Poverty Measure in Mexico

(recent history)

In 2001 the Ministry of Social Development created the National Committee for Poverty Measure (CTMP).

7 academics and 4 government members: CONAPO, INEGI,

Ministry of Social Development, and Presidencia)

In 2002 The Committee proposed a methodology:http://www.sedesol.gob.mx/archivos/801588/file/Docu01.pdf

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National Council of Evaluation of Social Development Policy (CONEVAL)

National Council of Evaluation of Social Development Policy

The Council is a public decentralized organism of the

federal public administration with technical

autonomy

The direction of the Council is given by: Six academic researchers and Executive secretary

Responsibilities:1) Establish the criteria to define, identify, and measure poverty, and2) Rule and coordinate the evaluation of the national policy of social development

Right now, CONEVAL is working on a new

methodology for multidimensional poverty measure

• Why do we use Stata?

To use survey and census data and generate inputs, indicators, and other relevant information to measure, characterize, and analyze the phenomenon of poverty; and help in the decision making process to alleviate it.

• Content of presentation:

1) Inputs in poverty measurement2) Construct poverty indicators3) Poverty analysis4) Poverty mapping

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Stata and CONEVALStata and the measurement of poverty

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Income poverty, 1992 -2006National, urban and rural

0.0

15.0

30.0

45.0

60.0

percentage

1992 1994 1996 1998 2000 2002 2004 2006years

National UrbanRural

Source: estim ates based on ENIG H 1992-2006

(food poverty line)Incom e poverty incidence, 1992 - 2006

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1) Inputs in poverty measurement Construction of food poverty line (example)

Adjustment coefficient:AC = consumed calories/required

caloriesper household

Reference households stratum:

Used to construct an observed food

basket and determine the (food) poverty line

2006 Official (food) poverty line:

Urban: $809.87 (mxn pesos)Rural: $598.70 (mxn pesos)

.8.9

11.1

1.2

1.3

Adjus

tment coeffic

ient

1 11 21 31 41 51 61 71 81M oving quintiles

Reference households Adj. coeff.Adj. coeff. = 1

Source: estim ates based on ENIG H 2006

National levelAdjustm ent coefficient by m oving quintiles

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1) Inputs in poverty measurement Non-food poverty lines: Inverse of Engel coefficient

Engel coefficient:Ratio that measures the expenses on

food in households as a proportion of the expenses needed

to cover:

- health and education: Capabilities line, and

- public transport, clothing, and housing: Assets line

The ratio is calculated for rural and urban areas in a

reference stratum

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10.0

20.0

30.0

40.0

percentage

1992 1994 1996 1998 2000 2002 2004 2006years

Poverty Incidence 95% Conf. Int.95% Conf. Int.

Source: estim ates based on ENIG H 1992-2006

(food poverty line)Incom e poverty incidence, 1992 - 2006

1) Inputs in poverty measurement Standard errors and hypothesis testing

Standard errors:# delimit ;foreach x in 1992 1994 1996 1998

2000 2002 2004 2005

2006 { ;use “$data\poverty `x’.dta”,

clear ;svyset upm [w=factorp], strata(est)

vce(linearized) ;svy linear, level(95): mean povlp1 ;} ;Hypothesis testing:

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2) Poverty indicatorsPoverty gap and squared poverty gap

0.0

5.0

10.0

15.0

20.0

25.0

FGT(1) x 100

1992 1994 1996 1998 2000 2002 2004 2006years

National UrbanRural

Source: estim ates based on ENIG H 1992-2006

(food poverty line)Poverty gap, 1992 - 2006

0.0

5.0

10.0

15.0

FGT(2) x 100

1992 1994 1996 1998 2000 2002 2004 2006years

National UrbanRural

Source: estim ates based on ENIG H 1992-2006

(food poverty line)Squared poverty gap, 1992 - 2006

# delimit ;gen fgt0 = cond(income<pov_line,1,0) ;gen fgt1 = cond(fgt0==1,(pov_line -

income)/pov_line,0) ;gen fgt2 = cond(fgt0==1,((pov_line -

income)/pov_line)^2,0) ;tabstat fgt* [w=factorp], stats(mean)

by(area) format(%6.4f) ;

FGT(α) :

Foster, J., J. Greer, and E. Thorbecke (1984), “A Class of Decomposable Poverty Measures”, Econometrica, vol. 52, pp. 761-765.

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2) Poverty indicatorsChild poverty indicators

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3) Poverty analysisPoverty profile

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3) Poverty analysisComponents of changes in poverty measures

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3) Poverty analysisMicrosimulation of an intervention (example)

.0001.0002.0003.0004.0005.0006

Density

0 200 598.7 800 1200Incom e

O bserved Sim ulatedSource: estim ates based on ENIG H 2006

Rural areas, 2006Incom e distribution, m icrosim ulation

0.0001

.0002

.0003

Density

0 200 600 809.87 1200Incom e

Observed Sim ulatedSource: estim ates based on ENIG H 2006

Urban areas, 2006Incom e distribution, m icrosim ulation

Microsimulation :Using the income and expenditure

survey of 2006, themicrosimulation consists in increasing

by $180 pesos the households’ income of a public

programme net

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4) Poverty mappingStata and the income poverty maps

• Poverty mapping

National level indicators often hide important differences between regions or areas. The analysis of poverty interventions consequently requires a focus on poverty information that is more geographically disaggregated.

• Stata and poverty mapping

1) Social gap index2) Estimate income poverty and a set of indicators from survey data3) Generate the same set of indicators from census data (very hard work!)4) Validate poverty measures with other indices5) Compute changes in poverty

MethodologyPrincipal component analysis

(PCA) using Census data 2005

Variables defined in the General Law of Social

Development

Index stratification: Very low Low Medium High Very high

Disaggregation levels: Entities Municipalities Localities

Components1. Population over 15 years

illiterate2. Population between 6 and 14 that

doesn’t attend to school.3. Population over 15 years with

incomplete basic education4. Households with people between

15 and 29 years with at least one member with less than 9

years of education5. Population without health

security6. Dwellings without washing

machines7. Dwellings without refrigerator

8. Dwellings with sand floor9. Dwellings without toilets

10. Dwellings without tubed water of the public network

11. Dwellings without sewage12. Dwelling without electric

energy13. Overcrowding 14

4) Poverty mappingSocial gap index 2005

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Social gap indexLocalities, 2005

Social Gap Degree

Very low

High

Very high

Low

Medium

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Poverty mappingIncome poverty and other indicators

0.25

.5.75

1Income poverty FGT

(0)

.4 .6 .8 1HDI

M unicipalities Fitted valuesSource: estim ates based on CONEVAL and UNDP

M unicipalities, 2005Incom e poverty and Hum an Developm ent Index (HDI)

0.25

.5.75

1Income poverty FGT

(0)

-2.5 0 2.5 5SG I

M unicipalities Fitted valuesSource: estim ates based on CONEVAL

M unicipalities, 2005Incom e poverty and Social gap index (SG I)

Y = 2.13 – 2.39 Xadj. R2 = .7177

Y = 0.33 + 0.17 Xadj. R2 = .8032

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Ranks Total m unicipalities

[1.6 - 20.6) 522

[20.6 - 39.7) 582

[39.7 - 58.7) 577

[58.7 - 77.8) 500

[77.8 - 96.8] 272

Food poverty mapMunicipalities, 2000

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Food poverty mapMunicipalities, 2005

Ranks Total m unicipalities

[0.11 - 16.9) 562

[16.9 - 33.7) 848

[33.7 - 50.5) 552

[50.5 - 67.2) 355

[67.2 - 84.0] 137

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025

5075

100

Income poverty 2005

0 25 50 75 100Incom e poverty 2000

M unicipalities 45° lineSource: estim ates based on CONEVAL

M unicipalities, 2000 - 2005Changes in poverty

Changes in income povertyMunicipalities, 2000 - 2005

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Total m unicipalities

Significant decrease 933

Non significant increase 1474

Significant increase 46

Rank

Changes in food poverty mapMunicipalities, 2000 - 2005

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San Pablo Cuatro VenadosPopulation: 1,267 Hab. Food poverty: 81.1%Social gap degree: Very high

Santiago el PinarPopulation: 2,854 Hab. Food poverty: 84.0%Social gap degree: Very high

ChalchihuitánPopulation: 13,295 Hab.Food poverty: 81.4%Social gap degree: Very high

San Juan CancucPopulation: 24,906 Hab.Food poverty: 83.7%Social gap degree: Very high

ChanalPopulation: 9,050 Hab.Food poverty: 83.1%Social gap degree: Very high

Income poverty and Social gap indexFive municipalities with highest poverty rates and very high social gap level

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Ranks Total m unicipalities

[0.00 - 2,500) 1037

[2,500 - 15,000) 1083

[15,000 - 100,000) 327

[100,000 - 172,271) 7

Food poverty map (number of population in poverty)Municipalities, 2005

• Please visit us at:www.coneval.gob.mx

• Do files available at:http://www.coneval.gob.mx/coneval2/htmls/medicion_pobreza/HomeMedicionPobreza.jsp?categorias=MED_POBREZA,MED_POBREZA-med_pob_ingre

• Surveys available at:http://www.inegi.org.mx/est/contenidos/espanol/soc/sis/microdatos/enigh/default.aspx?s=est&c=14606

Authors:Héctor H. Sandoval (hhsandoval@coneval.gob.mx) Rodrigo Aranda Balcazar (ranohead@gmail.com)

Martín Lima (jlimav@gmail.com)

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CONEVAL online