The Means Test

General Description:

The means test uses a very simplified household survey to determine poverty levels of households. A small number of relatively easily verifiable indicators are usually used. A composite score is then derived to rank households. Often the indicators are used as a check list to screen out potentially better off households. Indicators used generally are asset based (land ownership, livestock ownership, ownership of radio, television, etc.), but can sometimes even be social. For example, female headed households as a demographic category often constitute the poorest households in rural areas. Educational levels are also sometimes used.

Conducting a Means Test

Field staff will generally exclude the obviously well off households in each village and then make personal visits to remaining households. A short interview focusing on the selected indicators is then conducted. At Grameen Bank, for example, information only on landownership and value of productive assets are calculated. Households owning more than half an acre of land or owning productive assets valued at more than the price of an acre of land, are excluded. SEWA on the other hand, uses a much more detailed means test using housing characteristics, household membership profile (age, sex, occupation, etc., of all household members), the size of farm operated and income from it, information on livestock, income from other sources, and value of household assets, as indicators.

The success of the means test is dependant on using very few selected indicators that are strongly correlated to poverty levels. Such indicators would therefore vary from region to region. Grameen�s use of land ownership works well since there is an established significant statistical correlation between poverty and landownership in rural Bangladesh. In Andhra Pradesh, India where SHARE operates, land ownership has to be further subdivided between ownership of irrigated and non irrigated land. Otherwise land ownership doesn�t work well in many other regions of the world.

Related literature:

Overcoming the obstacles of identifying the poorest families: using participatory wealth ranking (PWR), the CASHPOR House Index (CHI), and other measurements to identify and encourage the participation of the poorest families, especially the women of those families ()
Simanowitz, A.; Nkuna, B.; Kasim, S.; Gailey, Robert / Microcredit Summit, 2002