Poverty Assessment in Palestine: Efforts and National Reports

1. Palestine National Authority Palestinian Central Bureau of Statistics السلطة الوطنية الفلسطينية الجهاز المركزي للإحصاء الفلسطيني POVERTY ASSESMENT IN PALESTINE UNSD/ DESA FOURTH REGIONAL WORKSHOP ON POVERTY Amman: 25-28/11/2004

2. Efforts on Poverty Analysis • Poverty Dimensions in the West Bank and Gaza Strip (Sha’ban and Botmeh, 1995) This study determined the poverty lines in the Palestinian Territory in harmony with socioeconomic situation. The study based mainly on the basic needs. • National Poverty Report. It is considered as the 1st National document that defines a national poverty line based on scientific methodology and national data. (National Commission of Poverty) • The Palestinian Participatory Assessment Project (PPA 2001). The main object of this project was to understand the multidimensional nature of poverty and inclusion of the perspective and priorities of the poor in poverty analysis and to increase local capacity to analyze and monitor poverty and policy impacts. 1st stage was completed and the 2nd stage on going. (National Commission of Poverty, represented by Ministry of planning)

3. Efforts on Poverty Analysis • Deep Palestinian Poverty in the Midst of the Economic Crisis, December 2004. (World Bank and the PCBS) This reports attempted to clarify the debate, by providing estimate of the current poverty and discussing some of the reasons why estimate vary; also addresses the factors of cause of poverty, the impact of emergency assistance efforts on poor, and potential impact of an economic recovery on longer-term poverty rates. The report focuses on the situation of the poorest of the poor (those who fall into subsistence poverty). • Monitoring System

4. Official Statistics of Poverty Introduction To have a comprehensive system that investigate, analyze, alleviate, and monitor poverty among Palestinians, three stages were distinguished: • In the 1st stage: there was a need to arrive to a conclusion about the magnitude of the problem (starting from indirect indicators, such as employ. Living standards, educational status, health status, etc.. • In the 2nd stage: there was a need to identify a “national poverty line”for measuring, monitoring the changes that affect poverty. In parallel, there was a need to create a process to enhance poor people to be involved in the analysis of poverty and formulation of reduce it through policy. • In the 3rd stage (as parallel stage): there was a need to create a type of monitoring system of reporting

5. Official Poverty Definition Data Sources: • Household Expenditure and Consumption Survey (PECS): which was conducted by PCBS during the years 1996-1998, 2001, 2004. • The instruments were designed following the UN/ILO recommendations. • A self-weighted sample consisting of the 12 sub-samples, one for each month. • A survey period of 12 months to account for the seasonal differences. • A recording period of one month. • Data capture by record keeping with the help of the interviewer support if needed. • The survey provides details data on expenditure and consumption. • National Poverty Survey, (PNS 2003): which was carried by PCBS during December 2003, to have a quick accurate picture of expenditure and consumption poverty since the start of Intifada in September; (the Palestinian-Israeli conflict). It is a nationally representative poverty survey, with a sample of 3,100 households.

6. Official Poverty Definition • The definition combines absolute and relative features and is based on a budget of basic needs for a reference household • A six-member household consisting of 6 persons; (2 adults and 4 children is adopted as a reference household; in the case of other sample households, the poverty line has been amended). • Household was used as a unit of analysis;(based on a assumption that households constitute an income pooling and\ or consumption-sharing unit). • Consumption is used instead of income; (based on assumption that expenditure\ consumption reflects needs more than income). • Two poverty lines have been developed according to actual spending patterns of Palestinian families. • Deep (absolute) poverty line: reflects a budget of food, clothing, and housing • Relative poverty line: adds other necessities including health care, education, transpiration, personal care, and housekeeping supplies.

7. Official Poverty Definition • The two poverty lines have been adjusted to reflect the different consumption needs of families based on there composition; (household size and number of children). • Three main poverty indexes are used: • The head count index (P0): which gives the percentage of population in poverty or deep poverty, • The poverty gap index (P1): which gives the percentage by which the average income of the poor is below the poverty line, and • Poverty severity index (P2): which gives the mean of the squared consumption deficits. • A two-parameter equivalence adult scale is used to reflect the differences in the household size and\ or composition; E= (A + P.C)F E= (# of adults + 0.46* #of children)^0.89

8. Official Poverty Definition • The poverty line was calculated at the National level , but poverty indices were disaggregated to cover regional and some essential socio-economic indicators, such as locality type; household size, socio-economic indicators of the head of the household; etc.. • The methodology of compiling poverty line provides the possibility of updating it over time using CPI. • Households are used as a unit of presentation, but poverty information can be presented on individuals; (considering all household members as poor or not according to the household situation of poverty). • The geographic differences for cost of living are not adjusted, even prices (cost of living) vary over different regions of the Palestinian Territory. • The official poverty line and figures used available data from the Palestinian Expenditure and Consumption surveys.

9. Official Poverty Definition Questions raised on the methodology used in poverty in Palestine: • Use of consumption vs. Income: while consumption is considered as a better measure of well-being than disposal income for poverty assessment, but its use for this issue may not necessarily translate into more reliable poverty statistics, especially, if we want to to highlight the variation in living standards due to variation of income, remittances, loans, and social aid. • Data Source Reliability Issues: as mentioned poverty statistics in Palestine depends on household expenditure and consumption surveys; the frame of the 1st three rounds were derived from a Comprehensive Sample Frame, while the last two rounds were derived from the 1997 census data, in addition census frame (problems ofsample frame); in addition there is a decrease in the sample size between these rounds (4500 in year 1996, 3500 in 1997, 1998, and 2004, and planed to be 2400 in 2005); also, there is a need to be careful when testing sampling errors those due to sample size. • Frequency of monitoring: in Palestine, poverty figures depend on the available data from PECS; to have a regularly poverty statistics, there is a need to conduct an annual PECS survey, otherwise we will be only able to update poverty line using CPI.

10. Official Poverty Definition Main Findings Mostly, all studies found that a variety of factors are strongly related with poverty: • Poor tend to have larger families, more children, and relatively low level of education. • Poverty is strongly related to unemployment and short-term employment. • There is a need to use economic modules in studying poverty, since cross-tabs some times give misleading conclusions.