Determining BPL status : some methodological improvements

Working paper

Many have criticized the 2002 Below the Poverty Line methodology used in the rural areas of India to identify eligible beneficiaries. On the one hand, the data were of poor quality and coverage, and were influenced by corruption; on the other hand, the methodology suffered a number of flaws, particularly in treating ordinal data as cardinal, and allowing complete substitutability among all levels of achievement. In order to isolate and scrutinize the methodological points, this article uses the 2005-06 National Family Health Survey (NFHS) dataset, to generate two scores: a pseudo-BPL score, and our preferred score, which we call M₀. M₀ uses the Adjusted Head Count methodology developed by Alkire and Foster (2007). Not only is the newly proposed methodology able to identify the poor households more effectively, but it also provides insights for policy. For example, since the M₀ measure can be broken down by dimensions, we can immediately show significant differences in the components of poverty in different states.

Authors: Alkire, S; Seth, S

• Publication status: Published
• Peer review status: Reviewed (other)
• Publisher: Oxford Poverty & Human Development Initiative (OPHI)
• Series: OPHI research in progress
• Publication date: 2009-01-01
• Edition: Publisher's version
• Paper number: 7a
• Language: English
• Keywords: ophi