ACCION Poverty Assessment Framework

This paper lays out the analytic framework for the analysis that will be employed to compare income, expenditure and socio-economic characteristics of ACCION partner clients with international and national poverty lines.

The paper is divided into four sections covering:

• Overview of various poverty indicators and means of conducting poverty assessment - it describes the "standard of living" approach to measure poverty using income and expenditure as consumption indicators;
• Detailed research questions that are to be addressed through the analysis;
• Comparison of available national-level household data and ACCION's client data - it discusses the strengths and limitations of existing data, and means of quantifying and correcting measurement errors inherent in the datasets;
• Actual poverty assessment framework - it outlines the steps necessary for performing and presenting the analysis.

Finally the paper discusses the methodological issues inherent in this framework and the recommended means of adjustment. The issues include:

• Inflation: Changes in food prices will have a greater impact on the poor than the non-poor as they spend a larger percentage of their income on food;
• Overall Economic Conditions: During an economic recession, one would expect households' consumption and incomes to decrease. Hence data should be taken from similar time periods to be comparable;
• Regional differences in cost of living: The cost-of-living varies within countries and therefore adjustments must be made to ensure that the poverty indicators are spatially comparable.