Publication:
Quantifying Vulnerability to Poverty : A Proposed Measure, Applied to Indonesia

Loading...
Thumbnail Image
Files in English
English PDF (1.35 MB)
2,595 downloads
Date
2000-09
ISSN
Published
2000-09
Abstract
Vulnerability is an important aspect of households' experience of poverty. Many households, while not currently in poverty, recognize that they are vulnerable to events - a bad harvest, a lost job, an illness, and unexpected expense, an economic downturn - that could easily push them into poverty. Most operational measures define poverty as some function of the shortfall of current income, or consumption expenditures from a poverty line, and hence measure poverty only at a single point in time. The authors propose a simple expansion of those measures to quantify vulnerability to poverty. They define vulnerability as a probability, the risk that a household will experience at least one episode of poverty in the near future. A household is defined as vulnerable if it has 50-50 odds, or worse of falling into poverty. Using those definitions, they calculate the "vulnerability of poverty line" (VPL) as the level of expenditures below which a household is vulnerable to poverty. The VPL allows the calculation of a "headcount vulnerability rate" (the proportion of households vulnerable to poverty), a direct analogue of the "headcount poverty rate". The authors implement this approach using two sets of panel data from Indonesia. First they show that if the poverty line is set so that the headcount poverty rate is twenty percent, the proportion of households vulnerable to poverty is roughly 30-50 percent. In addition to the twenty percent currently poor, an additional 10-30 percent of the population is at substantial risk of poverty. They illustrate the usefulness of this approach for targeting, by examining differences in vulnerability between households by gender, level of education, urban-rural residence, land-holding status, and sector of occupation of the head of household.
Link to Data Set
Citation
Pritchett, Lant; Suryahadi, Asep; Sumarto, Sudarno. 2000. Quantifying Vulnerability to Poverty : A Proposed Measure, Applied to Indonesia. Policy Research Working Paper;No. 2437. © World Bank, Washington, DC. http://hdl.handle.net/10986/21355 License: CC BY 3.0 IGO.
Report Series
Report Series
Other publications in this report series
  • Publication
    Closing the Gaps
    (Washington, DC: World Bank, 2024-05-17) Contreras, Ivette; Dinarte-Diaz, Lelys; Palacios-Lopez, Amparo; Costa, Valentina; Romero, Steffanny
    Can alternative survey methods address the underreporting of women’s and youths’ labor market outcomes, and thus improve the measurement of the underlying gender- and age-based gaps This paper addresses this question using a survey experiment in El Salvador that compares two alternative survey methods—a list of activities survey module and enforced self-responses—against a traditional household survey, which consists of proxy responses without a list of activities module. The findings show that including the list of activities module yields higher work and employment rates for the average respondent compared to the standard household survey. Notably, when using the list of activities module, the reported work gap between men and women falls by 8.1 percentage points. Moreover, when using enforced self-responses, the male age gaps in employment and work rates fall by 13.9 and 12.3 percentage points, respectively. The paper provides evidence that the prevalence of peers’ informal employment or social norms for domestic obligations drive these results.
  • Publication
    Heat and Law Enforcement
    (Washington, DC: World Bank, 2024-05-17) Behrer, A. Patrick; Bolotnyy, Valentin
    Using administrative criminal records from Texas, this paper shows how high temperatures affect the decision making of police officers, prosecutors, and judges. It finds that police reduce the number of arrests made per reported crime on the hottest days and that arrests made on these days are more likely to be dismissed in court. For prosecutors, high temperature on the day they announce criminal charges does not appear to affect the nature and severity of the charges. However, judges dismiss fewer cases, issue longer prison sentences, and levy higher fines when ruling on hot days. The results suggest that the psychological and cognitive consequences of exposure to high temperatures have meaningful consequences for criminal defendants as they interact with the criminal justice system.
  • Publication
    The Role of Technology in Reducing the Gender Gap in Productivity
    (Washington, DC: World Bank, 2024-05-16) Cirera, Xavier; Cruz, Marcio; Martins-Neto, Antonio; Lee, Kyungmin; Nogueira, Caroline
    This paper explores new firm-level data to examine the gender gap in technology adoption and the associated effect on firm performance. The data show a small difference in technology sophistication between firms managed by women and those managed by men, but there are larger differences in terms of labor productivity. Firms with female top managers are just as likely to adopt the most sophisticated technologies for general business functions that are common across all firms except for enterprise resource planning. However, firms managed by women adopt advanced technologies less frequently for sector-specific business functions. The study also finds that firms with higher technology sophistication tend to have higher productivity and the returns to the use of more sophisticated technologies are larger in businesses managed by women, which helps to narrow the productivity gap between firms managed by women and those managed by men.
  • Publication
    Electricity Reliability and Intra-Sectoral Structural Change in Sub-Saharan Africa
    (Washington, DC: World Bank, 2024-05-16) Kaba, Kabinet; Tchana Tchana, Fulbert
    Although access to reliable electricity enables manufacturing companies to increase their output, there have been few studies of the distribution of output growth between export and domestic markets. Although some papers have examined the impact of electricity reliability on exports (in volume terms or dummy terms), little is known about the way electricity reliability can push existing manufacturing firms more into the export market. Using the World Bank Enterprise Surveys, this paper examines a sample of 13,025 manufacturing firms surveyed in 39 Sub-Saharan African countries between 2006 and 2022. The paper employs the entropy balancing approach to examine how access to reliable electricity affects the distribution of manufacturing firms' sales between export and domestic markets. The results show that for medium-sized manufacturing firms, electricity access increases the share of exports in total sales at the expense of the share of domestic sales. However, the results for small and large manufacturing companies are not statistically significant. Among medium-sized manufacturing enterprises, domestic companies improve their exports relative to domestic sales when they have access to electricity, with mixed results for foreign companies. Even in resource-intensive countries, electricity access enhances the share of exports relative to domestic sales. The intra-sectoral structural change induced by power access is not limited to medium-sized companies in the manufacturing sector; the same pattern is observed in the service sector with mixed findings.
  • Publication
    From Survey to Big Data
    (Washington, DC: World Bank, 2024-05-16) Arvis, Jean-François; Ulybina, Daria; Wiederer, Christina
    The World Bank has published the Logistics Performance Index since 2007. The Logistics Performance Index used to be based exclusively on perception ratings from a global survey of logistics professionals. In 2023, it was augmented with key performance indicators derived from massive global international shipment tracking data (data on container shipping, air cargo, and postal logistics). The new set of indicators measure the speed and connectivity of international supply chains. This paper presents the data sources, rationale, and production of the indicators. It does not discuss the findings from the new indicators, nor does it introduce additional empirical work. The paper complements the 2023 issue of Connecting to Compete, the companion report to the Logistics Performance Index.
Journal
Journal Volume
Journal Issue
Associated URLs
Associated content
Citations