JABATAN PERANGKAAN MALAYSIA
DEPARTMENT OF STATISTICS, MALAYSIA
POVERTY LINE INCOME:
MALAYSIA’s EXPERIENCES
BY
AZAHARI MOHD RASLAN
SENIOR DIRECTOR
PRICES INCOME AND EXPENDITURE STATISTICS DIVISION
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JABATAN PERANGKAAN MALAYSIA
DEPARTMENT OF STATISTICS, MALAYSIA
Scope of
Presentation
Introduction
Why Measure Poverty (P)
How to Define Poverty Line (PL)
Malaysia Poverty Line Income (PLI)
Comparison PLI 1977 & PLI 2005
Measuring Poverty
Conclusion
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JABATAN PERANGKAAN MALAYSIA
DEPARTMENT OF STATISTICS, MALAYSIA
INTRODUCTION
Poverty is easily to recognized but difficult to
define.
Orshansky 1969:
 Poverty like beauty, lies in
the eyes of the beholder
Concise Oxford Dictionary :
 Lacking adequate money or
means to live comfortably.
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JABATAN PERANGKAAN MALAYSIA
DEPARTMENT OF STATISTICS, MALAYSIA
WHY MEASURE POVERTY?
Identify the poor
and hardcore
poor
Make
comparison
WHY
MEASURE
POVERTY?
Help
design
interventions
To help
policy
maker
Identify the
determinants of
poverty
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JABATAN PERANGKAAN MALAYSIA
DEPARTMENT OF STATISTICS, MALAYSIA
HOW TO DEFINE PL?
1
HOW TO
DEFINE PL?
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Absolute Poverty Line
Set as an absolute level below which consumption is
considered to be low to meet the minimum welfare level
acceptable.
2
Not a survival line
Typically used in low or middle income countries
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JABATAN PERANGKAAN MALAYSIA
DEPARTMENT OF STATISTICS, MALAYSIA
…Continue
(i)
Referencing
Problem
Two major
issues:
(ii)
Identification
problem
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JABATAN PERANGKAAN MALAYSIA
DEPARTMENT OF STATISTICS, MALAYSIA
…Continue
Foodenergy
method
Direct Calorie
Intake
Cost of
Basic Needs
Method to
develop PL
Ravillion and Lockshin (2003)
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JABATAN PERANGKAAN MALAYSIA
DEPARTMENT OF STATISTICS, MALAYSIA
Step for Cost of Basic Needs approach:
Select nutrional
requirement
Gram of Dietary
Food per calorie
MOH,UPM & UKM
Select a single
food bundle
for the entire
population,
using
prevailing
tastes
HES
Price this
bundle at
prevailing
price for each
of the group
analyzed
Price of Food per
unit-CPI
Set the nonfood allowance
in line with the
consumption
behavior of
those around
the food poverty
line
HES
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JABATAN PERANGKAAN MALAYSIA
DEPARTMENT OF STATISTICS, MALAYSIA
MALAYSIA PLI
FOOD PLI
NON-FOOD PLI
DEMOGRAPHIC
INFORMATION:
-SEX
-AGE
- LOCATION
NOT POOR
POOR
HARDCORE POOR
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JABATAN PERANGKAAN MALAYSIA
DEPARTMENT OF STATISTICS, MALAYSIA
Step to determine Food PLI
Calorie
grams
Price
Step to determine Non-Food PLI
Consists of:
clothing
housing
durables
transport
other
non
foods
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JABATAN PERANGKAAN MALAYSIA
DEPARTMENT OF STATISTICS, MALAYSIA
…Continue
Output:
1
The price per 100 calories of a diet will
full-fat milk suitable for a household with
children aged 7 and under
2
The price per 100 calories of a diet with
less full-fat milk suitable for a household
without children under 7
3
Relative Non-Food prices by State and
Stratum on each 6 digit Item
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JABATAN PERANGKAAN MALAYSIA
DEPARTMENT OF STATISTICS, MALAYSIA
Recommended Daily Energy Requirements for Malaysian
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JABATAN PERANGKAAN MALAYSIA
DEPARTMENT OF STATISTICS, MALAYSIA
Recommended Daily Energy Requirements for Malaysian
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JABATAN PERANGKAAN MALAYSIA
DEPARTMENT OF STATISTICS, MALAYSIA
Alternative Malaysian Food Baskets
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JABATAN PERANGKAAN MALAYSIA
DEPARTMENT OF STATISTICS, MALAYSIA
Household Expenditure Survey: Selected Food Item
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JABATAN PERANGKAAN MALAYSIA
DEPARTMENT OF STATISTICS, MALAYSIA
Price per 100 Calorie in 2004 (RM)
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JABATAN PERANGKAAN MALAYSIA
DEPARTMENT OF STATISTICS, MALAYSIA
Relative non-Food Prices by State and Stratum, 2004
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JABATAN PERANGKAAN MALAYSIA
DEPARTMENT OF STATISTICS, MALAYSIA
Relative non-Food Prices by State and Stratum, 2004, (cont…)
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JABATAN PERANGKAAN MALAYSIA
DEPARTMENT OF STATISTICS, MALAYSIA
2005-based PLIs for the ‘Model Household’* by state and Stratum, 2004
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JABATAN PERANGKAAN MALAYSIA
DEPARTMENT OF STATISTICS, MALAYSIA
COMPARISON PLI 1977 & PLI 2005
PLI 1977
PLI 2005
• No spatial CPI
differential
• Nutrition based on PLI
• The calorie
requirement were not
sex specific
• Changing by update of
CPI
• Spatial price difference
• Nutrition based on
advice from nutritionist
• Calorie requirement
differ by sex
• Change in basket of
good
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JABATAN PERANGKAAN MALAYSIA
DEPARTMENT OF STATISTICS, MALAYSIA
…Continue
POVERTY RATE
Methodology 1977
Methodology 2005
No. HH below than PLI X 100
Total Household
No. HH below than Total PLI X 100
Total Household
HARDCORE POVERTY RATE
Methodology 1977
Methodology 2005
No. HH below than middle of PLI X 100
Total Household
No. HH below than Food PLI X 100
Total Household
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JABATAN PERANGKAAN MALAYSIA
DEPARTMENT OF STATISTICS, MALAYSIA
MEASURING POVERTY
Headcount Index
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JABATAN PERANGKAAN MALAYSIA
DEPARTMENT OF STATISTICS, MALAYSIA
TIME SERIES-POVERTY
%
50
49.3
40
Poor
37.4
30
20
16.5
10
8.5
3.8
0
1970
1979
1989
1999
2009
1.7
2012
Year
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JABATAN PERANGKAAN MALAYSIA
DEPARTMENT OF STATISTICS, MALAYSIA
LOOKING FOWARD
i
Bottom 40%
ii
Poverty Gap
iii
Poverty Mapping
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JABATAN PERANGKAAN MALAYSIA
DEPARTMENT OF STATISTICS, MALAYSIA
THANK YOU
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