World Bank Poverty Lines

FROM 1996 TO 1999, the Policy Research and Poverty and Social Policy Departments of the World Bank joined forces to publish Poverty Lines, a newsletter designed to summarize the ongoing research on poverty by the World Bank and others. Poverty Lines, a brief two-page publication, translated the often technical, statistical, and economic theory-oriented language found in many of the studies on poverty into reader-friendly informational articles for noneconomists and working professionals interested in poverty studies and for those working toward the alleviation of poverty. Poverty Lines summarized articles written for the Living Standards Measurement Study (LSMS) Working Paper Series.

The LSMS is an instrument designed to systematically collect information on consumption patterns and income at the household level. The LSMS was established by the World Bank in 1980 in order to improve methods of data collection and the type and quality of household data collected by government statistical offices in developing countries. The objectives of the LSMS were to develop new means for monitoring progress in the fight against poverty and the struggle to raise standards of living, to identify the economic impact and other consequences on households of current and proposed government policies, and to improve communications among survey statisticians, analysts, and policymakers. The LSMS provides accurate measures of variables common to a broad cross-section of the population (such as poverty, malnutrition, and employment rates).

Households are asked to answer detailed questions on their spending habits and sources of income. The resulting data allow analysts to evaluate current living standards, track changes over time, and provide timely input into policy formation.

The surveys are designed to be repeated on a regular basis, tracking conditions as they change over time. Using the survey results, analysts can produce a comprehensive measure of household welfare and evaluate its distribution across the population and over time; [Page 1186]evaluate patterns in access to social services, such as schools, healthcare, or welfare programs; identify the determinants of socioeconomic outcomes (such as how women's education affects fertility decisions or how health status affects workers' labor supply); and examine household responses to changes in economic conditions or government programs (such as how price subsidies influence consumption patterns, or how healthcare choices are affected by clinic user fees). The surveys are conducted more or less regularly in most countries.

LSMS household surveys are an important tool in measuring and understanding poverty in developing countries. Surveys with several, if not all, of the hallmarks of the Living Standards Measurement Study have been conducted in dozens of countries around the world. Although the first few LSMS surveys followed a very similar format, as time passed and countries with different circumstances were added, substantial variety arose in the surveys across the different countries. Problems in comparing year-to-year poverty surveys demonstrated that researchers needed to make changes in survey design. These sample survey data collection methods are increasingly being complemented by participatory methods whereby people are asked what their basic needs are and what poverty means for them. Interestingly, new research shows a high degree of concordance between poverty lines based on objective and subjective assessments of needs.

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