Measuring Poverty in West Bank and Gaza

Abstract

The Palestinian expenditure and consumption survey (PECS) is a multi-purpose survey (on household budget and living standards), based on which official poverty estimates are estimated for the Palestinian territories. The 2016 PECS was implemented for a 12-month period, starting in October 2016. The technical assistance program had two main goals: (i) improving survey design and reducing the time-gap from survey completion to the availability of data for analysis; and (ii) to inform internal discussions and debate on improving the poverty measurement methodology, by taking advantage of newly available data and improved measurement methods. This main objective of this technical review is to consider several different elements of the official poverty estimation methodology with the aim of informing and improving poverty measurement going forward; and to document the availability and identification of new survey and consumer price index (CPI) data that can be used to implement the improvements. The note also explores the implications of alternate adjustments to household size (per capita versus adult equivalent) on poverty. The main recommendations focus on key improvements needed for more accurate estimates of welfare and distributional measures. The review also highlights additional improvements that can be incorporated and where appropriate, affirms the methodological decisions adopted under current practice. This review is organized as follows: section 1 gives introduction. Section 2 briefly discusses the main methodological issues in poverty measurement. Section 3 explains the construction of different components of the welfare aggregate. Section 4 discusses the methodology for calculating poverty lines. Section 5 examines the robustness of poverty estimates to different methodological choices made; and section 6 concludes with recommendations.