ANALYSIS OF POVERTY PROBLEMS NEW FOCUS ON DEVELOPING COUNTR IES

Aparajita (2008), provided a useful insight on how income is use to measure poverty, household income comprising both farm income and non farm income were use as a basis for assessment of income poverty, however it is practical that some limitations were apparent when use for assessment which include understatement of the actual income due to fear of tax, security reasons and other government related tax policy. For this method the major disadvantage with it, was it has not taking into consideration bitterness, division, exclusion, wealth, chance, and location of individuals.

But Paxson (1992) and Deaton (1992) in their effort uses living standard as an index, they measured it using current consumer spending or current income. Though spending is intuitively preferred since it is a measure of living standard, because current spending is a better indicator of current Income because current satisfaction is directly dependent on consumption but not Income. However, Gerhardt etal, in their work criticized the use of Income as being crude measure of poverty. To them Income comprised of tax and family size were also another impediment is the size of Income. Although their argument were significant but can give a good measure, since it can be objectively measured if tax and family size, depreciation and other forms of payment by the individual were taking into consideration.

Poverty had been measured on absolute sense. In this a minimum sets of resource persons need to survive acute hunger, deprivation are said to constitute basic need which are converted into the ingredients which enter in the minimum basket of essential goods and services regardless of their definition into common denominator usually a monetary value. The absolute implies total or cumulative consumption or expenditure. Serrano and Raco (2009) uses absolute or total expenditure level to classify household poverty, the method disregard geographic characteristic of household under study. In their method the absolute or total expenditure of all household were summed and proceeded to set minimum standard as poverty line, in the method the society was

divided into two categories, the poor category and non poor category so any individual, community or household falling below the poverty line, margin or line is said to be consider to suffer from poverty.

The absolute method is sometimes called the general poverty line which is usually defined by the total cost of the required basket of goods needed to satisfy the basic consumer needs such as food, clothing, housing, education, health and other basic requirements. The weakness of this method implies that it does not take care of seasonal, regional and cultural differences in consumption pattern, difference between two household with different sizes cannot be possible and even within household of the same size the composition of the household members vary hence their exist a variation on expenditure ascribed from such difference, geographical characteristics which are vital are not put into view other variation are gender, age, season, climate, food imbalances. Moreover, the definition of this minimum is not clear what are criteria of setting the minimum? no measure to capture shelter, clothing, and transportation to place of work or farm, others are variation based on satisfaction or utility by individual household member are neglected.

Even with the updated version of the method which incorporates the household size, in this version ratio of total expenditure level and house hold size were used to provide a head count measure. The weakness of the head count measure is the disregard to composition of household members since differences occur when a household has many children below the 18 or when a household has more elderly people above 65 years. Such a household will invariably have different absolute expenditure. Another weakness is measurement of social equality, association, difference in location and living condition, opportunity are all ignored.

Relative poverty is another approach to poverty measurement which was a measurement of the resources and living conditions of parts of the population in relation to others was used to assess differences in poverty level, relative implies compares to other people level. This is a measure for segment of population that is poor relative to the set income or expenditure of the general population. Line is set at half () of the mean income or fortieths (40th) percentile of the distribution or average income of forty percent (40%) of Population. The number of population

whose incomes is less than predetermine percentage of mean income of 50% or less of the mean income are class to be poor. Relative methods uses resource and living condition of part of population compared to others and classify some as poor and some as not poor. In the method individual are considered poor when their income or expenditure is less than the basic needs or poverty line set for the group or class within the population usually (Calculated on consumption per adult equivalent per 28days). This method seems inappropriate because it measures inequalities which exist in any society but not poverty, inequality in consumption cannot be assumed to be the only an indicator of poverty.

Another effort was made by Poverty and Human Development Report (2009) which estimated poverty using household expenditure. The estimate daily calorie requirements of individual based on gender, body weight, and activity performed, compares with estimated actual calorie intake by individual as well as converting quantities of goods and services consumed by individual to calories, then calculate unit calories cost by dividing total expenditure food by individual, and established food poverty line per household by multiplying calorie requirements per individual by body weight, age, gender, daily physical activity by unit cost, while calculate non food expenditure, and regress log of dependent variables and food poverty line and divided by average precipitated food expenditure). The total poverty line is to subtract the total poverty line from food poverty to produce non food poverty line. The major weakness to this method is its inability to use in survey, in spite of its objective nature, while all poverty analysis uses survey as a basis for data collection hence the method were consider weak or non practical. Therefore data cannot obtained from it. It is also applicable to only small sample if sample is large capturing each respondent body weight are not feasible so also activity perform by individual cannot be valued in monetary terms

Browning, (2004) uses the equivalent scale method which is an extension of relative and absolute method but incorporates some modification to capture weakness observed on the two methods. The approach was to constructs an equivalent scale, weighting each household according to number of household size and composition base on age. In this method the first adult count 1 additional adult count 0.75 while children less than second adult count 0.5. In the method the weight drops down from 1, 0.75, 0.5 and 0.25. Although the method is good since it

takes care of the difference in household size and household composition but require a lot of transformation the strength of the method is ability to handle questions of household size and age composition but has not taken care of gender differences since nursing, lactating mothers, pregnant women, and prevalence of illness, might have potential of causing problems and hence require extra expenditure, another weakness of the method is choice of parameter is subjective, also in the method medical expenses may create an impression of the household enjoying a better well being while it is the opposite case, also expenses on wedding and other ceremonies create similar impression with medical expenses. The Conceptual Background Consequently the theoretical background of the method is, household expenditures are translated into adult equivalent, what adult member household would require for obtaining the same utility. However, this idea seems to be week since household collectively has no distinctive utility. The preference can only be associated to individual member but not to the collective household members. The problem with the use of equivalent scales include that what is considered minimum cost to achieved a given level of wellbeing or minimum set of resource a person needs to survive were affected by culture, location, food habit and Income and education background and resource base of the respondent, others are price of commodities, distance to market, inflation and variety of food items available to the respondent, others include social and

economics context of the respondents matters greatly. Therefore the use of equivalent scales to set a poverty line to be impact on the result obtained from such research.

Onu and Omokoro (2008); Serrano and Raco (2009) uses econometric approach, they considers functional relationship exist and was use to examine household expenditure as a proxy to poverty measure. In the method total household monthly expenditure depend age of house head, house hold size, farm size, income, expenditure on food, rent expenses, transport cost, clothing, medication, utility service, seasonality, education. They uses the econometric method to

compute for strength, magnitude and direction of the relationship. The disadvantage of the method include the data has to be entirely continuous variable with few qualitative ones another data problem include interdependence between the variables as determinant of poverty especially if many parameters were taken at a time. (UBOS, 2010; Durgesh and Pathak, 2011).

(United Nation Development Programme, 1990) Believe that poverty line are believe to be the level of welfare enjoyed it is measured in two major dimensions. The first approach to setting of poverty line is the Absolute approach, which account for real value over time and space. This can be measured in different ways either Head count ration; Incidence, Gap, Income Shortfall, Composite (Physical quantities of life index (PQLI), Augmented physical quantities of life Index(PAQLI), and Human development index (HDI). Headcount means ratio of poor to total population. This gives the proportion of population below poverty line. The major weakness to the approach is that it is insensitive to severity of poverty, and change below the poverty line. While the poverty Gap method means Income gap which is the difference between line and mean Income of the poor. Another one is the composite method or Sen Index which uses this relation S= H[I+(1-I)Gp). Where =I = Average Income Shortfall as percentage of the poverty line, yi Income of ith poor household, z Poverty line, qz Number of household with income below z. H =q/n headcount ration, N total number of household, Gp - Gini co-efficient among poor =0=Gp>1 S, is an Increasing function of the head count index. Gp ds/dh>0 ds/di >0 ds/dgp>0. The method is equally a relative approach. The major weakness of the method it rely on the inequality function which were estimated from Gini which does not take the account differences between poor and rich but only takes an inequality in the society.

Conclusively generally, Giovanni and Paolo (2005), poverty assessment rely on setting of poverty line below which are consider poor this involve some political decision for from the perspective of social policy, the poverty line represents criterion by which it can be decided which citizen needs special benefits from government to supplements their Income. The major criticisms on the methodology use of poverty line are many. Poverty line are constructed on the basis of standard of living which such rely on prices and which are updated each year as a result of rising prices but average living standard may rise with development and economic growth. Rising prices could not fully reflect rising living standard. As such the real value of the poverty line adjusted for rising prices only may not increase at all. As a result poverty standard is below the average standard of living today than it was originally designed.

The argument that poverty measurements are not fitted to addressing poverty problem, most poverty measurements only address one side of the poverty. Economic poverty was the commonest approach, leaving the rest unattended. Hence many scholars believe the use of poverty line is not tackling the real assessment. This is because the use of poverty line is subjective usually using either head count ration which has multiple disadvantages, or calorie intake which certain indicators such as weight of individual, activities perform by individual

cannot be assess using survey and most poverty studies uses survey research this create an impression of doubt over the result so obtained hence result in varied opinion over the methodology.