Who is poor?

In the past poverty was usually assessed with the famous 1 usd or 2 usd per day poverty lines. However, new poverty assessements are moving away from expenditures and income that are quite difficult to assess correctly to assets that can be assessed through farm household survey easily, as for example the demographic health surveys (DHS).

The wealth index is a composite measure of a household's cumulative living standard. The wealth index is calculated using easy-to-collect data on a household's ownership of selected assets, such as televisions and bicycles; materials used for housing construction; and types of water access and sanitation facilities. - See more at: http://www.dhsprogram.com/topics/wealth-index/Wealth-Index-Construction.cfm#sthash.aMwBEa0h.dpuf

Wealth index are the novel way to assess poverty and is computed for any DHS survey or farm household survey that has an extensive asset section. In most simple words, the wealth index ranks household based on assets and categorizes them into wealth quintile. 

In order to define the weight of every asset in the index, a principal component analysis is implemented. The first factor (loading) is used as weight. Find more info about the wealth index here.

However there are also downsides to wealth index. The main one is that it is a relative measurement of poverty that is computed for each country separately.

Many efforts are done to move away from country specific indexes to more regional ones allowing to compare poverty across countries. A very interesting approach is presented in this FAO working paper.

Some good explanations on the economics of droughts

I started this morning with reading the USaid global water newsletter, and found a very interesting article on the the economics of drought.
I think one lesson to retain is, that many farmers living in a crop-livestock mixed system produce food to feed their families and consequently are not affected to much by food price volatility. On the contrary, pastoralists who mostly live in the the drought affected zone, do rely on food markets to access food. They sell livestock to get cash with which they then buy staple food. In time of droughts, livestock prices collapse (excess supply because too many people need to sell) and staple food prices increase (supply shortage), leaving people hungry. Interventions should therefore aim at stabilizing prices, the article shows how the Ethiopian government does this with the productive safety net program.

Open publication - Free publishing - More drought

Open publication - Free publishing

Famine in the Horn of Africa: Challenges and Opportunities for Mitigating Drought-Induced Food Crises

Today, the CGIAR (consultative group on International Agricultural Research) hold a media briefing over the famine in the Horn of Africa to discuss evidence based intervention in arid areas.

One of the key topic that was addressed is the role of vulnerability of the farmers of the Horn of Africa and how to make this farmer more resilient and able to cope with shocks, such as for example drought. Topic addressed where :
- market access and market information
- information about weather and location of fodder
- improve fodder for livestock
- veterinary services for livestock
- drought tolerant crops
- water storage for crop, livestock and domestic use
- food aid, and information systems to inform about where food surpluses are
- weather insurances

The whole discussion reminds us that there is no such a thing than one simple solution. Every place is different, in location like Somalia with very little rainfall, it does not make sense to talk about irrigation schemes. Livestock provides more food security that crop. Whereas in areas with more rainfall, agro-ecological specific drought resistant crops be made available in affordable small packages can make more sense.

If you got curious, look at the full debate :