Characteristics of Poverty Depth Severity and Vulnerability
David Gordon, in conjunction with research by the United Nations, presents a
scale for understanding the depth and severity of poverty. The deprivation scale sequences
from no deprivation to mild, moderate, severe, and extreme levels. The scale does not
attempt to undermine the significance of general deprivation, but allows for the severity
of circumstance for those in the lowest quintile to be recognized.
This scale seeks to determine some general characteristics of the ultra poor; not
only as a function of income, expenditure, or consumption, but in a much more
comprehensive and dynamic method. Absolute poverty thresholds include commodities
such as food, clean water, sanitation, shelter, education, and health as well as including
access to information and access to services. These represent some thresholds for what is
determined to be basic human needs. An absolute poverty threshold exists if a person or
household does not meet two or more standards of the criteria. This methodology merges
the traditional definitions of poverty with multidimensional analysis.
Furthermore, one can expand on the differences between deprivation and severe
deprivation. For example, according to Gordon’s deprivation scale, if an individual has a
body mass index under 16, they are severely underweight and therefore represent the
element of severe deprivation. The scale moves up to a body mass index of 18.5, anything
below this threshold would represent deprivation. Using the BMI to calculate health and
nourishment is useful. While it does not take into account individual preference, nutrition,
or food baskets, it does provide a general idea of a person’s health by using their height
and weight and oftentimes, age and gender. Clearly, there are variations for standard or
optimal BMI and this measure has many limitations. However, because the cut off for
severe deprivation is staggered to a very low BMI number, it can be very practical when
used with other deprivation indicators.
His scale also elaborates on specific criteria to determine the standards of his
scale. Each one differentiates between deprivation and severe deprivation. Although his
criteria are useful for understanding general thresholds for deprivation and severe
deprivation, they ignore a crucial factor, the perception of poverty.
In perceiving poverty on any scale, the role of inequality cannot be ignored.
Inequality can intensify poverty, not only in terms of statistical facts, but in opinions of
circumstance as well. If an individual is living in deprivation, that deprivation can seem
exaggerated if his neighbor is living in luxury. Therefore, the perception of poverty
cannot be ignored when looking at levels of deprivation.
Within any given community, certain individuals may not perceive themselves as
poor at all, even though they might not have access to health or educational facilities or
they live in mud floor houses without modern sanitation. By most standards, this would
constitute an extreme level of poverty. But if most of the community lived within these
same sets of living or social circumstances, their own interpretation of poverty would be
limited to their direct experience. For example, if everyone in an indigenous tribe in
South America lived in mud huts and used the local river for sustenance, inequality does
not seem readily apparent. There is not a large discrepancy between the different groups
in the tribe (although power and politics within any society are bound to play a role).
However if a particular few of that group have access to other facilities or modern
technology, or are even aware that it exists regardless of their lifestyle, they may perceive
their situation as more unequal and more dire than otherwise
For example, indigenous populations in South America may not view themselves
as living in severe poverty although they could potentially fall under that category
according to Gordon’s eight criteria. Some of these groups use rivers and ponds instead of
modern plumbing. They have no access to healthcare; they live in houses with mud floors
or no floors at all; they share space with four or more people per room; they have no
access to newspapers, radios, computers, or other modern information sources. While
many of these things may be true for large groups of marginalized peoples in societies,
they do not automatically infer severe poverty. These criteria are largely based on a
modern Western version of deprivation and minimum living standards, enhanced by
inequalities in a society. You cannot be a “have not” if you are not exposed to certain
assets that would allow you to “have” something in the first place.
Vulnerability
There are certain freedoms, choices, and rights that limit a person in poverty.
Deprivation reflects vulnerability; the poor are often at risk in terms of health, education,
social stability, or ill treatment and abuse by society or the state. The vulnerability
dimension is usually due to events in which an individual has no control. For example,
violence, disease, economic shocks and natural disasters all reinforce a person’s attitude
towards his own perception of poverty. Vulnerability, in this aspect, “exacerbates material
poverty and weakens their bargaining position” of groups at risk. The poor often have no
voice, control, or representation in their personal development. Vulnerability represents
the risk a household has of falling into poverty. These groups often fall into poverty
clusters and are highly sensitive to shocks such as emergency medical expenses, lost jobs,
natural disasters, bad business profits, etc. Vulnerability can be mitigated through giving
at-risk groups of society empowerment and their opportunities and security. Vulnerability
is crucial in the experience and processes of poverty.
Interpretation and Perception of Poverty
Interpretations of poverty and poorness are subjective. What constitutes poverty to
one individual may be perceived differently to another. Different poverty thresholds can
be determined by subjective poverty lines, which depend on the personal judgment of an
individual or household’s standard of living. The benefit of this threshold is that it
identifies poverty measurement as an intrinsically deduced judgment by a person of what
is acceptable as minimum living standard. Subjective poverty is more dependent on
personal perception and considerations by the population that is being measured. For
example, if the inequality rate is high in a country, the bottom quadrant of the population
may not be living in actual poverty. This group may perceive their poverty based on
comparisons to those with better living standards. Subjective poverty is an important
measure, but it can be problematic as it is inherently subject to individual preferences of
basic needs. These preferences are dynamic and differ based on relative criteria, such as
individual taste, location, gender, occupation, and price variations.
The perception of poverty plays an important role in understanding
impoverishment. A person’s individual perception of his own poverty greatly influences
his level of deprivation. A government’s perception of poverty would obviously play an
enormous role in determining social and welfare policy.
Subjective factors such as interpretation, poverty measurement, or methods for
quantifying growth demonstrate how poverty measures are conditional on the perception
of one’s understanding of poverty. This can be demonstrated by the nature and scale of
poverty studies in Egypt. Poverty analysis in Egypt differs widely in magnitude,
distribution, and incidence, illustrated by the various conflicting representations of
poverty in Egypt among current scholarship and research. Even more interesting is that
the majority of work on poverty in Egypt stems from the exact same survey data produced
by the Central Agency for Public Mobilization and Statistics and the Egyptian
government. Yet, although the data from CAPMAS is the only officially available data on
poverty figures in Egypt, different institutions, economists, and social researchers have
put a subjective spin on the overall results, painting a confusing and rather incoherent
picture of poverty in Egypt. This conflict arises from the different methodologies and
poverty lines used to indicate social welfare. Frequently, it is merely a minor change in
percentages of poverty measurement indexes. However, in the broader situation, millions
of people might be ignored or incorrectly aggregated into an author’s subjective category
of poverty.
Poverty in the Egyptian Context:
Poverty Research and Methodologies in Egypt
When considering the effects of political policy, economic reform, and social funding
directed toward welfare and well being in developing countries, policy formation should
focus on the importance of objective poverty research and accountability.
Poverty analysis and scholarship in Egypt are gathered from many different
authorities; from institutions such as the World Bank or IFPRI, private researchers,
Egyptian economists or other political economy scientists researching poverty statistics.
Most of these reports use primary data from Household Income Expenditure and
Consumption Surveys (HIECS) conducted by CAPMAS, the official statistical agency in
Egypt. These surveys began in 1957 by the Egyptian government but were conducted on
an irregular basis in 1964/65, 1974/75, and 1981/982. It was not until 1990 that
CAPMAS began issuing the surveys every 5 years.
While these surveys are useful in understanding broad trends in poverty in Egypt,
they have significant limitations. First, nutritional and food related data is not readily
available. Second, the results and methods of calculating individual diets, which vary
between differing ages, sexes, occupation, and geography, are ambiguous, leading many
poverty researchers to use their own interpretive methodologies to calculate the
magnitude and dimensions of poverty. Third, the Institute of National Planning and
CAPMAS did not release their surveys in an individual household form nor did they
specify these differences and relative measurements. Furthermore, it is also unclear how
CAPMAS accounted for regional variations with food and non-food pricing, which would
clearly impact the construction of expenditure-based poverty lines. Finally, all of the
poverty lines utilized are based on consumer expenditure data, which does not account for
saving or borrowing from other sources.
As previously mentioned, the most consistent source of poverty analysis and
measurement comes from the Household, Income, Expenditure, and Consumption
Surveys for the years 1990/91, 1995/96, 1999/00, and 2004/05. These surveys were
administrated through CAPMAS using household specific poverty lines, including both a
standardized food and a nonfood poverty line. Economists Hanaa Kheir el Din and Heba
el-Laithy analyzed these surveys in conjunction with poverty-related data from the
Ministry of Economic Development, CAPMAS, and the World Bank databases. The data
is useful in observing patterns of growth and poverty in Egypt during this period.
1990 marks the initial period of consistent CAMPAS studies which were then
surveyed and issued every five years. According to the Poverty Assessment Update, these
surveys consist of large samples drawn from the whole country and contain data on
income/consumption and expenditures on over 600 items of goods and services. They
provide “a good source of information on the distribution of welfare within Egyptian
society.” Second, the continuity of data is important both for accuracy and consistency,
although during this period, there was limited methodical or empirical data available from
official sources. No nationally representative unit level data was available for public
usage from either government or private sources. Most of the scholars who analyze and
report poverty statistics on Egypt note this lack of formal or reliable data for poverty and
inequality.
According to El Laithy and Kheir El Din’s results, poverty—including measures
such as depth, severity, incidence, etc.—declined during the second half of the nineties.
This was an indirect result of the drastic GDP growth in 1994/95 compared to earlier
years, particularly with regard to extremely high incidences of poverty in Egypt
throughout the 1980’s. According to the author’s estimates and information from the
HIECS, the results were interpreted using poverty indicators that represented a person’s
ability to obtain basic food and nonfood needs. This was based on individual per capita
poverty lines and then measured and calculated using household poverty lines. The
incidence, depth, and severity of poverty were calculated by using aggregate poverty
measures from 1990 to 2005. According to this data, poverty fell from 24.18% of the
population in 1990/91 to 19.41% in 1995/96. It decreased further from 19.41% to 16.74%
in 1999/00. The poverty rate then increased from 16.74 to 19.56 percent in 2004/05. The
data also showed that both the depth and severity of poverty followed similar patterns.
Both measures decreased dramatically from 1990/91 to 1995/96, dropped further in
1999/00, and then increased in 2004/05.
In terms of household income inequality the gini coefficient (the measure of
inequality of wealth) decreased from 1990/91 to 1995/96 which indicated a better
distribution of wealth. From 1995/96 to 1999/00, the gini coefficient increased slightly
which demonstrated an increase of wealth inequality. However, from 1999/00 to 2004/05,
inequality decreased to its lowest relative level in the 15-year period. Inequality was
lowest in 2004/05, suggesting a more equitable distribution of wealth and a smaller
poverty gap. If this information is marginally correct, one could arguably conclude that
income distribution has improved from 1990-2005. This data, compared with the survey
data, provides a general and approximate conceptualization of poverty in Egypt.
Poverty in Egypt
When discussing ultra poverty, extreme impoverishment, and absolute poor groups in a
society, one is talking about the highly marginalized, vulnerable, and high-risk social
groups. In Datt, Joliffe, and Sharma’s profile of poverty in Egypt, they note some of the
common characteristics of those living in severe impoverishment. They use per capita
consumption as a measure of individual welfare to reflect individual preferences
conditional on prices and incomes. They also incorporate regional differences, size and
age composition of households and nonfood consumption preferences for relatively poor
households to portray a comprehensive profile of the levels of poverty in Egypt.
Accordingly, in 1997, about 15.7 million or 26.5 percent of the population in Egypt was
classified as poor. Within this group of poor, 5.1 million were determined to be living in
absolute poverty or ultra poor. While the poverty gap index and headcount index did not
show the severity of poverty, the poverty-gap and squared-poverty-gap indexes are the
worst in the rural regions. However the Gini coefficient is worse in the urban areas.
Datt and Joliffe’s research in Egypt correlate with some demographic
generalizations in poverty indicators and comparisons. For example, some of the poorest
households have larger households and higher dependency ratios. These households have
members who are between the ages of 0-15 or over 60 and would not traditionally
contribute to the sustainability and management of a household. Instead they depend on
other members of the family for financial, economic, and social support. Extreme poor
household compositions typically are larger than poor households with an average 8
family members while poor households are around 5.4 members. Female-headed
households are also vulnerable and are at risk to live in absolute impoverishment. The
ultra poor have a much higher percentage of family members who do not complete
primary school. Most work as casual wage laborers; employment that is rarely consistent
and highly vulnerable to shocks. Absolute poverty is prevalent in rural areas, specifically
Upper Egypt. About seventy-four percent of the ultra poor population lives in rural areas.
Levels of Poverty, Impoverishment, and Deprivation
A comprehensive report on Egypt was issued as the Poverty Assessment Update in 2007,
which looks at the same survey time periods as El Laithy and Kheir El Din’s research.
The Ministry of Economic Development and the World Bank developed this study,
emphasizing the necessity for some kind of agreement on poverty measurement in Egypt.
The assessment conceded that, while no single method to accurately indicate or measure
poverty exists, it was important not to confine poverty within the framework of only
measuring limited income. In order to comprehensively measure the state of deprivation,
one should use the multiple dimensions of indicators and data into account.
The Poverty Assessment Update attempts to obtain a general consensus on poverty
measurement with statistical and analytical support from Ravallion, El Laithy, Lokshin,
and Banerji’s research, as well as prior research on the subject from the World Bank
archives. It claims self-accuracy by using local prices and poverty lines adjusted to
household demographics throughout the report.
This poverty assessment uses three primary aggregate measures to account for the
‘multidimensionality’ of poverty.69 First, the head count index measures the prevalence of
poverty determined by a poverty line. It shows the percentage of poor as a proportion of
the total population. However, this indicator does not reflect the dynamics of distribution
of the poor that exist below the poverty line, but simply paints a static picture of poor vs.
non-poor. Second, the poverty gap index calculates the depth and magnitude of poverty—
the gap between low-income expenditure levels and the poverty line. Lastly, the poverty
severity index measures the degree of inequality in the distribution below the poverty
line, giving a greater weight to households at the bottom of expenditure or income
distribution.
Instead of setting a standard income or consumption line which is often used in
research on this subject, the assessment classifies poverty into three groups: extreme,
absolute, and near poverty. These three groups combined constitute the poor. Each
category has its own poverty line and is assessed by comparing household consumption
by HIECS representative survey. In 2005 dollar values, one dollar purchasing power
parity (PPP) is the equivalent to 2.57 Egyptian pounds. Dollars with the same purchasing
power in the United States, when conflated with goods and services, are more expensive
in the US, one PPP dollar per day is equivalent of much less than a current exchange rate
would imply. Those classified as extremely poor are considered as individuals who spend
less than 995 Egyptian pounds (in 2005 PPP value) per year. Absolute poor is classified as
those spending less than 1,423 pounds per year. Those who are near poor spend between
1,424 and 1,854 pounds per year. One can expand on this approach by breaking the
estimated poverty lines even further to account for age, gender, region, and household
size.
While previous poverty measurements ignored the significant differences in
consumption patterns and prices across the region, the assessment uses a cost-of-
basicneeds methodology in order to establish subsistence minimums. For example, it is
crucial for accuracy to account for different requirements of different household
members, to take economies of scale within the household into account, as well as to
consider that non-food items can be shared among household members. The methodology
used in this report can account for the problems with previous poverty research in Egypt.
Accordingly, Egypt follows an absolute poverty line with a focus on those who are
deprived of the ‘most basic needs,’ rather than those who potentially face deprivation
relative to their fellow citizens. Using the PPP exchange rate as a set value for the 95/96,
99/00, and 04/05 surveys, two internationally standard poverty lines are used in this
report. This allows for a broader understanding of the circumstances of minimum living
standards, defined as 1$ a day, and those who are more prone or vulnerable to poverty
denoted by 2$ a day.
In combining this poverty line with total poverty line, the food poverty line is
supplemented by an allowance for expenditure for essential non-food goods. The price of
non-food expenses is estimated by identifying the share of non-food expenditure for
households whose total expenditure was equivalent to the food poverty line. Poverty rates
are based on comparisons between actual expenditure and the cost of a consumption
basket securing 2,470 calories per day per person, along with some additional basic
services.
This report thus concludes that approximately forty percent of the population in
Egypt is clustered between one and two dollars per capita a day. It also notes that in
examining the poverty trends from 1996-2005, the poverty rate was 19.4% in 1996,
16.7% in 2000, and 19.6% in 2005. This confirms El Laithy and Kheir El Din’s estimates.
The assessment further reports that those who faced extreme poverty were at 2% in 1996,
2.9% in 2000, and 3.8% in 2005. Those that were near poverty were at 32% in 1996,
25.9% in 2000, and 29.9 percent in 2005. The poverty gap index was 3.4% in 1996, 3.0%
in 2000, and 3.6% in 2005. The poverty severity index was at 2% in 1996, 2.9% in 2000,
and 3.8% in 2005. These conclusions represent the overall poverty profile of Egypt during
this time period.
Furthermore, one can expand on the differences between deprivation and severe
deprivation. For example, according to Gordon’s deprivation scale, if an individual has a
body mass index under 16, they are severely underweight and therefore represent the
element of severe deprivation. The scale moves up to a body mass index of 18.5, anything
below this threshold would represent deprivation. Using the BMI to calculate health and
nourishment is useful. While it does not take into account individual preference, nutrition,
or food baskets, it does provide a general idea of a person’s health by using their height
and weight and oftentimes, age and gender. Clearly, there are variations for standard or
optimal BMI and this measure has many limitations. However, because the cut off for
severe deprivation is staggered to a very low BMI number, it can be very practical when
used with other deprivation indicators.
His scale also elaborates on specific criteria to determine the standards of his
scale. Each one differentiates between deprivation and severe deprivation. Although his
criteria are useful for understanding general thresholds for deprivation and severe
deprivation, they ignore a crucial factor, the perception of poverty.
In perceiving poverty on any scale, the role of inequality cannot be ignored.
Inequality can intensify poverty, not only in terms of statistical facts, but in opinions of
circumstance as well. If an individual is living in deprivation, that deprivation can seem
exaggerated if his neighbor is living in luxury. Therefore, the perception of poverty
cannot be ignored when looking at levels of deprivation.
Within any given community, certain individuals may not perceive themselves as
poor at all, even though they might not have access to health or educational facilities or
they live in mud floor houses without modern sanitation. By most standards, this would
constitute an extreme level of poverty. But if most of the community lived within these
same sets of living or social circumstances, their own interpretation of poverty would be
limited to their direct experience. For example, if everyone in an indigenous tribe in
South America lived in mud huts and used the local river for sustenance, inequality does
not seem readily apparent. There is not a large discrepancy between the different groups
in the tribe (although power and politics within any society are bound to play a role).
However if a particular few of that group have access to other facilities or modern
technology, or are even aware that it exists regardless of their lifestyle, they may perceive
their situation as more unequal and more dire than otherwise
For example, indigenous populations in South America may not view themselves
as living in severe poverty although they could potentially fall under that category
according to Gordon’s eight criteria. Some of these groups use rivers and ponds instead of
modern plumbing. They have no access to healthcare; they live in houses with mud floors
or no floors at all; they share space with four or more people per room; they have no
access to newspapers, radios, computers, or other modern information sources. While
many of these things may be true for large groups of marginalized peoples in societies,
they do not automatically infer severe poverty. These criteria are largely based on a
modern Western version of deprivation and minimum living standards, enhanced by
inequalities in a society. You cannot be a “have not” if you are not exposed to certain
assets that would allow you to “have” something in the first place.
Vulnerability
There are certain freedoms, choices, and rights that limit a person in poverty.
Deprivation reflects vulnerability; the poor are often at risk in terms of health, education,
social stability, or ill treatment and abuse by society or the state. The vulnerability
dimension is usually due to events in which an individual has no control. For example,
violence, disease, economic shocks and natural disasters all reinforce a person’s attitude
towards his own perception of poverty. Vulnerability, in this aspect, “exacerbates material
poverty and weakens their bargaining position” of groups at risk. The poor often have no
voice, control, or representation in their personal development. Vulnerability represents
the risk a household has of falling into poverty. These groups often fall into poverty
clusters and are highly sensitive to shocks such as emergency medical expenses, lost jobs,
natural disasters, bad business profits, etc. Vulnerability can be mitigated through giving
at-risk groups of society empowerment and their opportunities and security. Vulnerability
is crucial in the experience and processes of poverty.
Interpretation and Perception of Poverty
Interpretations of poverty and poorness are subjective. What constitutes poverty to
one individual may be perceived differently to another. Different poverty thresholds can
be determined by subjective poverty lines, which depend on the personal judgment of an
individual or household’s standard of living. The benefit of this threshold is that it
identifies poverty measurement as an intrinsically deduced judgment by a person of what
is acceptable as minimum living standard. Subjective poverty is more dependent on
personal perception and considerations by the population that is being measured. For
example, if the inequality rate is high in a country, the bottom quadrant of the population
may not be living in actual poverty. This group may perceive their poverty based on
comparisons to those with better living standards. Subjective poverty is an important
measure, but it can be problematic as it is inherently subject to individual preferences of
basic needs. These preferences are dynamic and differ based on relative criteria, such as
individual taste, location, gender, occupation, and price variations.
The perception of poverty plays an important role in understanding
impoverishment. A person’s individual perception of his own poverty greatly influences
his level of deprivation. A government’s perception of poverty would obviously play an
enormous role in determining social and welfare policy.
Subjective factors such as interpretation, poverty measurement, or methods for
quantifying growth demonstrate how poverty measures are conditional on the perception
of one’s understanding of poverty. This can be demonstrated by the nature and scale of
poverty studies in Egypt. Poverty analysis in Egypt differs widely in magnitude,
distribution, and incidence, illustrated by the various conflicting representations of
poverty in Egypt among current scholarship and research. Even more interesting is that
the majority of work on poverty in Egypt stems from the exact same survey data produced
by the Central Agency for Public Mobilization and Statistics and the Egyptian
government. Yet, although the data from CAPMAS is the only officially available data on
poverty figures in Egypt, different institutions, economists, and social researchers have
put a subjective spin on the overall results, painting a confusing and rather incoherent
picture of poverty in Egypt. This conflict arises from the different methodologies and
poverty lines used to indicate social welfare. Frequently, it is merely a minor change in
percentages of poverty measurement indexes. However, in the broader situation, millions
of people might be ignored or incorrectly aggregated into an author’s subjective category
of poverty.
Poverty in the Egyptian Context:
Poverty Research and Methodologies in Egypt
When considering the effects of political policy, economic reform, and social funding
directed toward welfare and well being in developing countries, policy formation should
focus on the importance of objective poverty research and accountability.
Poverty analysis and scholarship in Egypt are gathered from many different
authorities; from institutions such as the World Bank or IFPRI, private researchers,
Egyptian economists or other political economy scientists researching poverty statistics.
Most of these reports use primary data from Household Income Expenditure and
Consumption Surveys (HIECS) conducted by CAPMAS, the official statistical agency in
Egypt. These surveys began in 1957 by the Egyptian government but were conducted on
an irregular basis in 1964/65, 1974/75, and 1981/982. It was not until 1990 that
CAPMAS began issuing the surveys every 5 years.
While these surveys are useful in understanding broad trends in poverty in Egypt,
they have significant limitations. First, nutritional and food related data is not readily
available. Second, the results and methods of calculating individual diets, which vary
between differing ages, sexes, occupation, and geography, are ambiguous, leading many
poverty researchers to use their own interpretive methodologies to calculate the
magnitude and dimensions of poverty. Third, the Institute of National Planning and
CAPMAS did not release their surveys in an individual household form nor did they
specify these differences and relative measurements. Furthermore, it is also unclear how
CAPMAS accounted for regional variations with food and non-food pricing, which would
clearly impact the construction of expenditure-based poverty lines. Finally, all of the
poverty lines utilized are based on consumer expenditure data, which does not account for
saving or borrowing from other sources.
As previously mentioned, the most consistent source of poverty analysis and
measurement comes from the Household, Income, Expenditure, and Consumption
Surveys for the years 1990/91, 1995/96, 1999/00, and 2004/05. These surveys were
administrated through CAPMAS using household specific poverty lines, including both a
standardized food and a nonfood poverty line. Economists Hanaa Kheir el Din and Heba
el-Laithy analyzed these surveys in conjunction with poverty-related data from the
Ministry of Economic Development, CAPMAS, and the World Bank databases. The data
is useful in observing patterns of growth and poverty in Egypt during this period.
1990 marks the initial period of consistent CAMPAS studies which were then
surveyed and issued every five years. According to the Poverty Assessment Update, these
surveys consist of large samples drawn from the whole country and contain data on
income/consumption and expenditures on over 600 items of goods and services. They
provide “a good source of information on the distribution of welfare within Egyptian
society.” Second, the continuity of data is important both for accuracy and consistency,
although during this period, there was limited methodical or empirical data available from
official sources. No nationally representative unit level data was available for public
usage from either government or private sources. Most of the scholars who analyze and
report poverty statistics on Egypt note this lack of formal or reliable data for poverty and
inequality.
According to El Laithy and Kheir El Din’s results, poverty—including measures
such as depth, severity, incidence, etc.—declined during the second half of the nineties.
This was an indirect result of the drastic GDP growth in 1994/95 compared to earlier
years, particularly with regard to extremely high incidences of poverty in Egypt
throughout the 1980’s. According to the author’s estimates and information from the
HIECS, the results were interpreted using poverty indicators that represented a person’s
ability to obtain basic food and nonfood needs. This was based on individual per capita
poverty lines and then measured and calculated using household poverty lines. The
incidence, depth, and severity of poverty were calculated by using aggregate poverty
measures from 1990 to 2005. According to this data, poverty fell from 24.18% of the
population in 1990/91 to 19.41% in 1995/96. It decreased further from 19.41% to 16.74%
in 1999/00. The poverty rate then increased from 16.74 to 19.56 percent in 2004/05. The
data also showed that both the depth and severity of poverty followed similar patterns.
Both measures decreased dramatically from 1990/91 to 1995/96, dropped further in
1999/00, and then increased in 2004/05.
In terms of household income inequality the gini coefficient (the measure of
inequality of wealth) decreased from 1990/91 to 1995/96 which indicated a better
distribution of wealth. From 1995/96 to 1999/00, the gini coefficient increased slightly
which demonstrated an increase of wealth inequality. However, from 1999/00 to 2004/05,
inequality decreased to its lowest relative level in the 15-year period. Inequality was
lowest in 2004/05, suggesting a more equitable distribution of wealth and a smaller
poverty gap. If this information is marginally correct, one could arguably conclude that
income distribution has improved from 1990-2005. This data, compared with the survey
data, provides a general and approximate conceptualization of poverty in Egypt.
Poverty in Egypt
When discussing ultra poverty, extreme impoverishment, and absolute poor groups in a
society, one is talking about the highly marginalized, vulnerable, and high-risk social
groups. In Datt, Joliffe, and Sharma’s profile of poverty in Egypt, they note some of the
common characteristics of those living in severe impoverishment. They use per capita
consumption as a measure of individual welfare to reflect individual preferences
conditional on prices and incomes. They also incorporate regional differences, size and
age composition of households and nonfood consumption preferences for relatively poor
households to portray a comprehensive profile of the levels of poverty in Egypt.
Accordingly, in 1997, about 15.7 million or 26.5 percent of the population in Egypt was
classified as poor. Within this group of poor, 5.1 million were determined to be living in
absolute poverty or ultra poor. While the poverty gap index and headcount index did not
show the severity of poverty, the poverty-gap and squared-poverty-gap indexes are the
worst in the rural regions. However the Gini coefficient is worse in the urban areas.
Datt and Joliffe’s research in Egypt correlate with some demographic
generalizations in poverty indicators and comparisons. For example, some of the poorest
households have larger households and higher dependency ratios. These households have
members who are between the ages of 0-15 or over 60 and would not traditionally
contribute to the sustainability and management of a household. Instead they depend on
other members of the family for financial, economic, and social support. Extreme poor
household compositions typically are larger than poor households with an average 8
family members while poor households are around 5.4 members. Female-headed
households are also vulnerable and are at risk to live in absolute impoverishment. The
ultra poor have a much higher percentage of family members who do not complete
primary school. Most work as casual wage laborers; employment that is rarely consistent
and highly vulnerable to shocks. Absolute poverty is prevalent in rural areas, specifically
Upper Egypt. About seventy-four percent of the ultra poor population lives in rural areas.
Levels of Poverty, Impoverishment, and Deprivation
A comprehensive report on Egypt was issued as the Poverty Assessment Update in 2007,
which looks at the same survey time periods as El Laithy and Kheir El Din’s research.
The Ministry of Economic Development and the World Bank developed this study,
emphasizing the necessity for some kind of agreement on poverty measurement in Egypt.
The assessment conceded that, while no single method to accurately indicate or measure
poverty exists, it was important not to confine poverty within the framework of only
measuring limited income. In order to comprehensively measure the state of deprivation,
one should use the multiple dimensions of indicators and data into account.
The Poverty Assessment Update attempts to obtain a general consensus on poverty
measurement with statistical and analytical support from Ravallion, El Laithy, Lokshin,
and Banerji’s research, as well as prior research on the subject from the World Bank
archives. It claims self-accuracy by using local prices and poverty lines adjusted to
household demographics throughout the report.
This poverty assessment uses three primary aggregate measures to account for the
‘multidimensionality’ of poverty.69 First, the head count index measures the prevalence of
poverty determined by a poverty line. It shows the percentage of poor as a proportion of
the total population. However, this indicator does not reflect the dynamics of distribution
of the poor that exist below the poverty line, but simply paints a static picture of poor vs.
non-poor. Second, the poverty gap index calculates the depth and magnitude of poverty—
the gap between low-income expenditure levels and the poverty line. Lastly, the poverty
severity index measures the degree of inequality in the distribution below the poverty
line, giving a greater weight to households at the bottom of expenditure or income
distribution.
Instead of setting a standard income or consumption line which is often used in
research on this subject, the assessment classifies poverty into three groups: extreme,
absolute, and near poverty. These three groups combined constitute the poor. Each
category has its own poverty line and is assessed by comparing household consumption
by HIECS representative survey. In 2005 dollar values, one dollar purchasing power
parity (PPP) is the equivalent to 2.57 Egyptian pounds. Dollars with the same purchasing
power in the United States, when conflated with goods and services, are more expensive
in the US, one PPP dollar per day is equivalent of much less than a current exchange rate
would imply. Those classified as extremely poor are considered as individuals who spend
less than 995 Egyptian pounds (in 2005 PPP value) per year. Absolute poor is classified as
those spending less than 1,423 pounds per year. Those who are near poor spend between
1,424 and 1,854 pounds per year. One can expand on this approach by breaking the
estimated poverty lines even further to account for age, gender, region, and household
size.
While previous poverty measurements ignored the significant differences in
consumption patterns and prices across the region, the assessment uses a cost-of-
basicneeds methodology in order to establish subsistence minimums. For example, it is
crucial for accuracy to account for different requirements of different household
members, to take economies of scale within the household into account, as well as to
consider that non-food items can be shared among household members. The methodology
used in this report can account for the problems with previous poverty research in Egypt.
Accordingly, Egypt follows an absolute poverty line with a focus on those who are
deprived of the ‘most basic needs,’ rather than those who potentially face deprivation
relative to their fellow citizens. Using the PPP exchange rate as a set value for the 95/96,
99/00, and 04/05 surveys, two internationally standard poverty lines are used in this
report. This allows for a broader understanding of the circumstances of minimum living
standards, defined as 1$ a day, and those who are more prone or vulnerable to poverty
denoted by 2$ a day.
In combining this poverty line with total poverty line, the food poverty line is
supplemented by an allowance for expenditure for essential non-food goods. The price of
non-food expenses is estimated by identifying the share of non-food expenditure for
households whose total expenditure was equivalent to the food poverty line. Poverty rates
are based on comparisons between actual expenditure and the cost of a consumption
basket securing 2,470 calories per day per person, along with some additional basic
services.
This report thus concludes that approximately forty percent of the population in
Egypt is clustered between one and two dollars per capita a day. It also notes that in
examining the poverty trends from 1996-2005, the poverty rate was 19.4% in 1996,
16.7% in 2000, and 19.6% in 2005. This confirms El Laithy and Kheir El Din’s estimates.
The assessment further reports that those who faced extreme poverty were at 2% in 1996,
2.9% in 2000, and 3.8% in 2005. Those that were near poverty were at 32% in 1996,
25.9% in 2000, and 29.9 percent in 2005. The poverty gap index was 3.4% in 1996, 3.0%
in 2000, and 3.6% in 2005. The poverty severity index was at 2% in 1996, 2.9% in 2000,
and 3.8% in 2005. These conclusions represent the overall poverty profile of Egypt during
this time period.
Furthermore, one can expand on the differences between deprivation and severe
deprivation. For example, according to Gordon’s deprivation scale, if an individual has a
body mass index under 16, they are severely underweight and therefore represent the
element of severe deprivation. The scale moves up to a body mass index of 18.5, anything
below this threshold would represent deprivation. Using the BMI to calculate health and
nourishment is useful. While it does not take into account individual preference, nutrition,
or food baskets, it does provide a general idea of a person’s health by using their height
and weight and oftentimes, age and gender. Clearly, there are variations for standard or
optimal BMI and this measure has many limitations. However, because the cut off for
severe deprivation is staggered to a very low BMI number, it can be very practical when
used with other deprivation indicators.
His scale also elaborates on specific criteria to determine the standards of his
scale. Each one differentiates between deprivation and severe deprivation. Although his
criteria are useful for understanding general thresholds for deprivation and severe
deprivation, they ignore a crucial factor, the perception of poverty.
In perceiving poverty on any scale, the role of inequality cannot be ignored.
Inequality can intensify poverty, not only in terms of statistical facts, but in opinions of
circumstance as well. If an individual is living in deprivation, that deprivation can seem
exaggerated if his neighbor is living in luxury. Therefore, the perception of poverty
cannot be ignored when looking at levels of deprivation.
Within any given community, certain individuals may not perceive themselves as
poor at all, even though they might not have access to health or educational facilities or
they live in mud floor houses without modern sanitation. By most standards, this would
constitute an extreme level of poverty. But if most of the community lived within these
same sets of living or social circumstances, their own interpretation of poverty would be
limited to their direct experience. For example, if everyone in an indigenous tribe in
South America lived in mud huts and used the local river for sustenance, inequality does
not seem readily apparent. There is not a large discrepancy between the different groups
in the tribe (although power and politics within any society are bound to play a role).
However if a particular few of that group have access to other facilities or modern
technology, or are even aware that it exists regardless of their lifestyle, they may perceive
their situation as more unequal and more dire than otherwise
For example, indigenous populations in South America may not view themselves
as living in severe poverty although they could potentially fall under that category
according to Gordon’s eight criteria. Some of these groups use rivers and ponds instead of
modern plumbing. They have no access to healthcare; they live in houses with mud floors
or no floors at all; they share space with four or more people per room; they have no
access to newspapers, radios, computers, or other modern information sources. While
many of these things may be true for large groups of marginalized peoples in societies,
they do not automatically infer severe poverty. These criteria are largely based on a
modern Western version of deprivation and minimum living standards, enhanced by
inequalities in a society. You cannot be a “have not” if you are not exposed to certain
assets that would allow you to “have” something in the first place.
Vulnerability
There are certain freedoms, choices, and rights that limit a person in poverty.
Deprivation reflects vulnerability; the poor are often at risk in terms of health, education,
social stability, or ill treatment and abuse by society or the state. The vulnerability
dimension is usually due to events in which an individual has no control. For example,
violence, disease, economic shocks and natural disasters all reinforce a person’s attitude
towards his own perception of poverty. Vulnerability, in this aspect, “exacerbates material
poverty and weakens their bargaining position” of groups at risk. The poor often have no
voice, control, or representation in their personal development. Vulnerability represents
the risk a household has of falling into poverty. These groups often fall into poverty
clusters and are highly sensitive to shocks such as emergency medical expenses, lost jobs,
natural disasters, bad business profits, etc. Vulnerability can be mitigated through giving
at-risk groups of society empowerment and their opportunities and security. Vulnerability
is crucial in the experience and processes of poverty.
Interpretation and Perception of Poverty
Interpretations of poverty and poorness are subjective. What constitutes poverty to
one individual may be perceived differently to another. Different poverty thresholds can
be determined by subjective poverty lines, which depend on the personal judgment of an
individual or household’s standard of living. The benefit of this threshold is that it
identifies poverty measurement as an intrinsically deduced judgment by a person of what
is acceptable as minimum living standard. Subjective poverty is more dependent on
personal perception and considerations by the population that is being measured. For
example, if the inequality rate is high in a country, the bottom quadrant of the population
may not be living in actual poverty. This group may perceive their poverty based on
comparisons to those with better living standards. Subjective poverty is an important
measure, but it can be problematic as it is inherently subject to individual preferences of
basic needs. These preferences are dynamic and differ based on relative criteria, such as
individual taste, location, gender, occupation, and price variations.
The perception of poverty plays an important role in understanding
impoverishment. A person’s individual perception of his own poverty greatly influences
his level of deprivation. A government’s perception of poverty would obviously play an
enormous role in determining social and welfare policy.
Subjective factors such as interpretation, poverty measurement, or methods for
quantifying growth demonstrate how poverty measures are conditional on the perception
of one’s understanding of poverty. This can be demonstrated by the nature and scale of
poverty studies in Egypt. Poverty analysis in Egypt differs widely in magnitude,
distribution, and incidence, illustrated by the various conflicting representations of
poverty in Egypt among current scholarship and research. Even more interesting is that
the majority of work on poverty in Egypt stems from the exact same survey data produced
by the Central Agency for Public Mobilization and Statistics and the Egyptian
government. Yet, although the data from CAPMAS is the only officially available data on
poverty figures in Egypt, different institutions, economists, and social researchers have
put a subjective spin on the overall results, painting a confusing and rather incoherent
picture of poverty in Egypt. This conflict arises from the different methodologies and
poverty lines used to indicate social welfare. Frequently, it is merely a minor change in
percentages of poverty measurement indexes. However, in the broader situation, millions
of people might be ignored or incorrectly aggregated into an author’s subjective category
of poverty.
Poverty in the Egyptian Context:
Poverty Research and Methodologies in Egypt
When considering the effects of political policy, economic reform, and social funding
directed toward welfare and well being in developing countries, policy formation should
focus on the importance of objective poverty research and accountability.
Poverty analysis and scholarship in Egypt are gathered from many different
authorities; from institutions such as the World Bank or IFPRI, private researchers,
Egyptian economists or other political economy scientists researching poverty statistics.
Most of these reports use primary data from Household Income Expenditure and
Consumption Surveys (HIECS) conducted by CAPMAS, the official statistical agency in
Egypt. These surveys began in 1957 by the Egyptian government but were conducted on
an irregular basis in 1964/65, 1974/75, and 1981/982. It was not until 1990 that
CAPMAS began issuing the surveys every 5 years.
While these surveys are useful in understanding broad trends in poverty in Egypt,
they have significant limitations. First, nutritional and food related data is not readily
available. Second, the results and methods of calculating individual diets, which vary
between differing ages, sexes, occupation, and geography, are ambiguous, leading many
poverty researchers to use their own interpretive methodologies to calculate the
magnitude and dimensions of poverty. Third, the Institute of National Planning and
CAPMAS did not release their surveys in an individual household form nor did they
specify these differences and relative measurements. Furthermore, it is also unclear how
CAPMAS accounted for regional variations with food and non-food pricing, which would
clearly impact the construction of expenditure-based poverty lines. Finally, all of the
poverty lines utilized are based on consumer expenditure data, which does not account for
saving or borrowing from other sources.
As previously mentioned, the most consistent source of poverty analysis and
measurement comes from the Household, Income, Expenditure, and Consumption
Surveys for the years 1990/91, 1995/96, 1999/00, and 2004/05. These surveys were
administrated through CAPMAS using household specific poverty lines, including both a
standardized food and a nonfood poverty line. Economists Hanaa Kheir el Din and Heba
el-Laithy analyzed these surveys in conjunction with poverty-related data from the
Ministry of Economic Development, CAPMAS, and the World Bank databases. The data
is useful in observing patterns of growth and poverty in Egypt during this period.
1990 marks the initial period of consistent CAMPAS studies which were then
surveyed and issued every five years. According to the Poverty Assessment Update, these
surveys consist of large samples drawn from the whole country and contain data on
income/consumption and expenditures on over 600 items of goods and services. They
provide “a good source of information on the distribution of welfare within Egyptian
society.” Second, the continuity of data is important both for accuracy and consistency,
although during this period, there was limited methodical or empirical data available from
official sources. No nationally representative unit level data was available for public
usage from either government or private sources. Most of the scholars who analyze and
report poverty statistics on Egypt note this lack of formal or reliable data for poverty and
inequality.
According to El Laithy and Kheir El Din’s results, poverty—including measures
such as depth, severity, incidence, etc.—declined during the second half of the nineties.
This was an indirect result of the drastic GDP growth in 1994/95 compared to earlier
years, particularly with regard to extremely high incidences of poverty in Egypt
throughout the 1980’s. According to the author’s estimates and information from the
HIECS, the results were interpreted using poverty indicators that represented a person’s
ability to obtain basic food and nonfood needs. This was based on individual per capita
poverty lines and then measured and calculated using household poverty lines. The
incidence, depth, and severity of poverty were calculated by using aggregate poverty
measures from 1990 to 2005. According to this data, poverty fell from 24.18% of the
population in 1990/91 to 19.41% in 1995/96. It decreased further from 19.41% to 16.74%
in 1999/00. The poverty rate then increased from 16.74 to 19.56 percent in 2004/05. The
data also showed that both the depth and severity of poverty followed similar patterns.
Both measures decreased dramatically from 1990/91 to 1995/96, dropped further in
1999/00, and then increased in 2004/05.
In terms of household income inequality the gini coefficient (the measure of
inequality of wealth) decreased from 1990/91 to 1995/96 which indicated a better
distribution of wealth. From 1995/96 to 1999/00, the gini coefficient increased slightly
which demonstrated an increase of wealth inequality. However, from 1999/00 to 2004/05,
inequality decreased to its lowest relative level in the 15-year period. Inequality was
lowest in 2004/05, suggesting a more equitable distribution of wealth and a smaller
poverty gap. If this information is marginally correct, one could arguably conclude that
income distribution has improved from 1990-2005. This data, compared with the survey
data, provides a general and approximate conceptualization of poverty in Egypt.
Poverty in Egypt
When discussing ultra poverty, extreme impoverishment, and absolute poor groups in a
society, one is talking about the highly marginalized, vulnerable, and high-risk social
groups. In Datt, Joliffe, and Sharma’s profile of poverty in Egypt, they note some of the
common characteristics of those living in severe impoverishment. They use per capita
consumption as a measure of individual welfare to reflect individual preferences
conditional on prices and incomes. They also incorporate regional differences, size and
age composition of households and nonfood consumption preferences for relatively poor
households to portray a comprehensive profile of the levels of poverty in Egypt.
Accordingly, in 1997, about 15.7 million or 26.5 percent of the population in Egypt was
classified as poor. Within this group of poor, 5.1 million were determined to be living in
absolute poverty or ultra poor. While the poverty gap index and headcount index did not
show the severity of poverty, the poverty-gap and squared-poverty-gap indexes are the
worst in the rural regions. However the Gini coefficient is worse in the urban areas.
Datt and Joliffe’s research in Egypt correlate with some demographic
generalizations in poverty indicators and comparisons. For example, some of the poorest
households have larger households and higher dependency ratios. These households have
members who are between the ages of 0-15 or over 60 and would not traditionally
contribute to the sustainability and management of a household. Instead they depend on
other members of the family for financial, economic, and social support. Extreme poor
household compositions typically are larger than poor households with an average 8
family members while poor households are around 5.4 members. Female-headed
households are also vulnerable and are at risk to live in absolute impoverishment. The
ultra poor have a much higher percentage of family members who do not complete
primary school. Most work as casual wage laborers; employment that is rarely consistent
and highly vulnerable to shocks. Absolute poverty is prevalent in rural areas, specifically
Upper Egypt. About seventy-four percent of the ultra poor population lives in rural areas.
Levels of Poverty, Impoverishment, and Deprivation
A comprehensive report on Egypt was issued as the Poverty Assessment Update in 2007,
which looks at the same survey time periods as El Laithy and Kheir El Din’s research.
The Ministry of Economic Development and the World Bank developed this study,
emphasizing the necessity for some kind of agreement on poverty measurement in Egypt.
The assessment conceded that, while no single method to accurately indicate or measure
poverty exists, it was important not to confine poverty within the framework of only
measuring limited income. In order to comprehensively measure the state of deprivation,
one should use the multiple dimensions of indicators and data into account.
The Poverty Assessment Update attempts to obtain a general consensus on poverty
measurement with statistical and analytical support from Ravallion, El Laithy, Lokshin,
and Banerji’s research, as well as prior research on the subject from the World Bank
archives. It claims self-accuracy by using local prices and poverty lines adjusted to
household demographics throughout the report.
This poverty assessment uses three primary aggregate measures to account for the
‘multidimensionality’ of poverty.69 First, the head count index measures the prevalence of
poverty determined by a poverty line. It shows the percentage of poor as a proportion of
the total population. However, this indicator does not reflect the dynamics of distribution
of the poor that exist below the poverty line, but simply paints a static picture of poor vs.
non-poor. Second, the poverty gap index calculates the depth and magnitude of poverty—
the gap between low-income expenditure levels and the poverty line. Lastly, the poverty
severity index measures the degree of inequality in the distribution below the poverty
line, giving a greater weight to households at the bottom of expenditure or income
distribution.
Instead of setting a standard income or consumption line which is often used in
research on this subject, the assessment classifies poverty into three groups: extreme,
absolute, and near poverty. These three groups combined constitute the poor. Each
category has its own poverty line and is assessed by comparing household consumption
by HIECS representative survey. In 2005 dollar values, one dollar purchasing power
parity (PPP) is the equivalent to 2.57 Egyptian pounds. Dollars with the same purchasing
power in the United States, when conflated with goods and services, are more expensive
in the US, one PPP dollar per day is equivalent of much less than a current exchange rate
would imply. Those classified as extremely poor are considered as individuals who spend
less than 995 Egyptian pounds (in 2005 PPP value) per year. Absolute poor is classified as
those spending less than 1,423 pounds per year. Those who are near poor spend between
1,424 and 1,854 pounds per year. One can expand on this approach by breaking the
estimated poverty lines even further to account for age, gender, region, and household
size.
While previous poverty measurements ignored the significant differences in
consumption patterns and prices across the region, the assessment uses a cost-of-
basicneeds methodology in order to establish subsistence minimums. For example, it is
crucial for accuracy to account for different requirements of different household
members, to take economies of scale within the household into account, as well as to
consider that non-food items can be shared among household members. The methodology
used in this report can account for the problems with previous poverty research in Egypt.
Accordingly, Egypt follows an absolute poverty line with a focus on those who are
deprived of the ‘most basic needs,’ rather than those who potentially face deprivation
relative to their fellow citizens. Using the PPP exchange rate as a set value for the 95/96,
99/00, and 04/05 surveys, two internationally standard poverty lines are used in this
report. This allows for a broader understanding of the circumstances of minimum living
standards, defined as 1$ a day, and those who are more prone or vulnerable to poverty
denoted by 2$ a day.
In combining this poverty line with total poverty line, the food poverty line is
supplemented by an allowance for expenditure for essential non-food goods. The price of
non-food expenses is estimated by identifying the share of non-food expenditure for
households whose total expenditure was equivalent to the food poverty line. Poverty rates
are based on comparisons between actual expenditure and the cost of a consumption
basket securing 2,470 calories per day per person, along with some additional basic
services.
This report thus concludes that approximately forty percent of the population in
Egypt is clustered between one and two dollars per capita a day. It also notes that in
examining the poverty trends from 1996-2005, the poverty rate was 19.4% in 1996,
16.7% in 2000, and 19.6% in 2005. This confirms El Laithy and Kheir El Din’s estimates.
The assessment further reports that those who faced extreme poverty were at 2% in 1996,
2.9% in 2000, and 3.8% in 2005. Those that were near poverty were at 32% in 1996,
25.9% in 2000, and 29.9 percent in 2005. The poverty gap index was 3.4% in 1996, 3.0%
in 2000, and 3.6% in 2005. The poverty severity index was at 2% in 1996, 2.9% in 2000,
and 3.8% in 2005. These conclusions represent the overall poverty profile of Egypt during
this time period.
Furthermore, one can expand on the differences between deprivation and severe
deprivation. For example, according to Gordon’s deprivation scale, if an individual has a
body mass index under 16, they are severely underweight and therefore represent the
element of severe deprivation. The scale moves up to a body mass index of 18.5, anything
below this threshold would represent deprivation. Using the BMI to calculate health and
nourishment is useful. While it does not take into account individual preference, nutrition,
or food baskets, it does provide a general idea of a person’s health by using their height
and weight and oftentimes, age and gender. Clearly, there are variations for standard or
optimal BMI and this measure has many limitations. However, because the cut off for
severe deprivation is staggered to a very low BMI number, it can be very practical when
used with other deprivation indicators.
His scale also elaborates on specific criteria to determine the standards of his
scale. Each one differentiates between deprivation and severe deprivation. Although his
criteria are useful for understanding general thresholds for deprivation and severe
deprivation, they ignore a crucial factor, the perception of poverty.
In perceiving poverty on any scale, the role of inequality cannot be ignored.
Inequality can intensify poverty, not only in terms of statistical facts, but in opinions of
circumstance as well. If an individual is living in deprivation, that deprivation can seem
exaggerated if his neighbor is living in luxury. Therefore, the perception of poverty
cannot be ignored when looking at levels of deprivation.
Within any given community, certain individuals may not perceive themselves as
poor at all, even though they might not have access to health or educational facilities or
they live in mud floor houses without modern sanitation. By most standards, this would
constitute an extreme level of poverty. But if most of the community lived within these
same sets of living or social circumstances, their own interpretation of poverty would be
limited to their direct experience. For example, if everyone in an indigenous tribe in
South America lived in mud huts and used the local river for sustenance, inequality does
not seem readily apparent. There is not a large discrepancy between the different groups
in the tribe (although power and politics within any society are bound to play a role).
However if a particular few of that group have access to other facilities or modern
technology, or are even aware that it exists regardless of their lifestyle, they may perceive
their situation as more unequal and more dire than otherwise
For example, indigenous populations in South America may not view themselves
as living in severe poverty although they could potentially fall under that category
according to Gordon’s eight criteria. Some of these groups use rivers and ponds instead of
modern plumbing. They have no access to healthcare; they live in houses with mud floors
or no floors at all; they share space with four or more people per room; they have no
access to newspapers, radios, computers, or other modern information sources. While
many of these things may be true for large groups of marginalized peoples in societies,
they do not automatically infer severe poverty. These criteria are largely based on a
modern Western version of deprivation and minimum living standards, enhanced by
inequalities in a society. You cannot be a “have not” if you are not exposed to certain
assets that would allow you to “have” something in the first place.
Vulnerability
There are certain freedoms, choices, and rights that limit a person in poverty.
Deprivation reflects vulnerability; the poor are often at risk in terms of health, education,
social stability, or ill treatment and abuse by society or the state. The vulnerability
dimension is usually due to events in which an individual has no control. For example,
violence, disease, economic shocks and natural disasters all reinforce a person’s attitude
towards his own perception of poverty. Vulnerability, in this aspect, “exacerbates material
poverty and weakens their bargaining position” of groups at risk. The poor often have no
voice, control, or representation in their personal development. Vulnerability represents
the risk a household has of falling into poverty. These groups often fall into poverty
clusters and are highly sensitive to shocks such as emergency medical expenses, lost jobs,
natural disasters, bad business profits, etc. Vulnerability can be mitigated through giving
at-risk groups of society empowerment and their opportunities and security. Vulnerability
is crucial in the experience and processes of poverty.
Interpretation and Perception of Poverty
Interpretations of poverty and poorness are subjective. What constitutes poverty to
one individual may be perceived differently to another. Different poverty thresholds can
be determined by subjective poverty lines, which depend on the personal judgment of an
individual or household’s standard of living. The benefit of this threshold is that it
identifies poverty measurement as an intrinsically deduced judgment by a person of what
is acceptable as minimum living standard. Subjective poverty is more dependent on
personal perception and considerations by the population that is being measured. For
example, if the inequality rate is high in a country, the bottom quadrant of the population
may not be living in actual poverty. This group may perceive their poverty based on
comparisons to those with better living standards. Subjective poverty is an important
measure, but it can be problematic as it is inherently subject to individual preferences of
basic needs. These preferences are dynamic and differ based on relative criteria, such as
individual taste, location, gender, occupation, and price variations.
The perception of poverty plays an important role in understanding
impoverishment. A person’s individual perception of his own poverty greatly influences
his level of deprivation. A government’s perception of poverty would obviously play an
enormous role in determining social and welfare policy.
Subjective factors such as interpretation, poverty measurement, or methods for
quantifying growth demonstrate how poverty measures are conditional on the perception
of one’s understanding of poverty. This can be demonstrated by the nature and scale of
poverty studies in Egypt. Poverty analysis in Egypt differs widely in magnitude,
distribution, and incidence, illustrated by the various conflicting representations of
poverty in Egypt among current scholarship and research. Even more interesting is that
the majority of work on poverty in Egypt stems from the exact same survey data produced
by the Central Agency for Public Mobilization and Statistics and the Egyptian
government. Yet, although the data from CAPMAS is the only officially available data on
poverty figures in Egypt, different institutions, economists, and social researchers have
put a subjective spin on the overall results, painting a confusing and rather incoherent
picture of poverty in Egypt. This conflict arises from the different methodologies and
poverty lines used to indicate social welfare. Frequently, it is merely a minor change in
percentages of poverty measurement indexes. However, in the broader situation, millions
of people might be ignored or incorrectly aggregated into an author’s subjective category
of poverty.
Poverty in the Egyptian Context:
Poverty Research and Methodologies in Egypt
When considering the effects of political policy, economic reform, and social funding
directed toward welfare and well being in developing countries, policy formation should
focus on the importance of objective poverty research and accountability.
Poverty analysis and scholarship in Egypt are gathered from many different
authorities; from institutions such as the World Bank or IFPRI, private researchers,
Egyptian economists or other political economy scientists researching poverty statistics.
Most of these reports use primary data from Household Income Expenditure and
Consumption Surveys (HIECS) conducted by CAPMAS, the official statistical agency in
Egypt. These surveys began in 1957 by the Egyptian government but were conducted on
an irregular basis in 1964/65, 1974/75, and 1981/982. It was not until 1990 that
CAPMAS began issuing the surveys every 5 years.
While these surveys are useful in understanding broad trends in poverty in Egypt,
they have significant limitations. First, nutritional and food related data is not readily
available. Second, the results and methods of calculating individual diets, which vary
between differing ages, sexes, occupation, and geography, are ambiguous, leading many
poverty researchers to use their own interpretive methodologies to calculate the
magnitude and dimensions of poverty. Third, the Institute of National Planning and
CAPMAS did not release their surveys in an individual household form nor did they
specify these differences and relative measurements. Furthermore, it is also unclear how
CAPMAS accounted for regional variations with food and non-food pricing, which would
clearly impact the construction of expenditure-based poverty lines. Finally, all of the
poverty lines utilized are based on consumer expenditure data, which does not account for
saving or borrowing from other sources.
As previously mentioned, the most consistent source of poverty analysis and
measurement comes from the Household, Income, Expenditure, and Consumption
Surveys for the years 1990/91, 1995/96, 1999/00, and 2004/05. These surveys were
administrated through CAPMAS using household specific poverty lines, including both a
standardized food and a nonfood poverty line. Economists Hanaa Kheir el Din and Heba
el-Laithy analyzed these surveys in conjunction with poverty-related data from the
Ministry of Economic Development, CAPMAS, and the World Bank databases. The data
is useful in observing patterns of growth and poverty in Egypt during this period.
1990 marks the initial period of consistent CAMPAS studies which were then
surveyed and issued every five years. According to the Poverty Assessment Update, these
surveys consist of large samples drawn from the whole country and contain data on
income/consumption and expenditures on over 600 items of goods and services. They
provide “a good source of information on the distribution of welfare within Egyptian
society.” Second, the continuity of data is important both for accuracy and consistency,
although during this period, there was limited methodical or empirical data available from
official sources. No nationally representative unit level data was available for public
usage from either government or private sources. Most of the scholars who analyze and
report poverty statistics on Egypt note this lack of formal or reliable data for poverty and
inequality.
According to El Laithy and Kheir El Din’s results, poverty—including measures
such as depth, severity, incidence, etc.—declined during the second half of the nineties.
This was an indirect result of the drastic GDP growth in 1994/95 compared to earlier
years, particularly with regard to extremely high incidences of poverty in Egypt
throughout the 1980’s. According to the author’s estimates and information from the
HIECS, the results were interpreted using poverty indicators that represented a person’s
ability to obtain basic food and nonfood needs. This was based on individual per capita
poverty lines and then measured and calculated using household poverty lines. The
incidence, depth, and severity of poverty were calculated by using aggregate poverty
measures from 1990 to 2005. According to this data, poverty fell from 24.18% of the
population in 1990/91 to 19.41% in 1995/96. It decreased further from 19.41% to 16.74%
in 1999/00. The poverty rate then increased from 16.74 to 19.56 percent in 2004/05. The
data also showed that both the depth and severity of poverty followed similar patterns.
Both measures decreased dramatically from 1990/91 to 1995/96, dropped further in
1999/00, and then increased in 2004/05.
In terms of household income inequality the gini coefficient (the measure of
inequality of wealth) decreased from 1990/91 to 1995/96 which indicated a better
distribution of wealth. From 1995/96 to 1999/00, the gini coefficient increased slightly
which demonstrated an increase of wealth inequality. However, from 1999/00 to 2004/05,
inequality decreased to its lowest relative level in the 15-year period. Inequality was
lowest in 2004/05, suggesting a more equitable distribution of wealth and a smaller
poverty gap. If this information is marginally correct, one could arguably conclude that
income distribution has improved from 1990-2005. This data, compared with the survey
data, provides a general and approximate conceptualization of poverty in Egypt.
Poverty in Egypt
When discussing ultra poverty, extreme impoverishment, and absolute poor groups in a
society, one is talking about the highly marginalized, vulnerable, and high-risk social
groups. In Datt, Joliffe, and Sharma’s profile of poverty in Egypt, they note some of the
common characteristics of those living in severe impoverishment. They use per capita
consumption as a measure of individual welfare to reflect individual preferences
conditional on prices and incomes. They also incorporate regional differences, size and
age composition of households and nonfood consumption preferences for relatively poor
households to portray a comprehensive profile of the levels of poverty in Egypt.
Accordingly, in 1997, about 15.7 million or 26.5 percent of the population in Egypt was
classified as poor. Within this group of poor, 5.1 million were determined to be living in
absolute poverty or ultra poor. While the poverty gap index and headcount index did not
show the severity of poverty, the poverty-gap and squared-poverty-gap indexes are the
worst in the rural regions. However the Gini coefficient is worse in the urban areas.
Datt and Joliffe’s research in Egypt correlate with some demographic
generalizations in poverty indicators and comparisons. For example, some of the poorest
households have larger households and higher dependency ratios. These households have
members who are between the ages of 0-15 or over 60 and would not traditionally
contribute to the sustainability and management of a household. Instead they depend on
other members of the family for financial, economic, and social support. Extreme poor
household compositions typically are larger than poor households with an average 8
family members while poor households are around 5.4 members. Female-headed
households are also vulnerable and are at risk to live in absolute impoverishment. The
ultra poor have a much higher percentage of family members who do not complete
primary school. Most work as casual wage laborers; employment that is rarely consistent
and highly vulnerable to shocks. Absolute poverty is prevalent in rural areas, specifically
Upper Egypt. About seventy-four percent of the ultra poor population lives in rural areas.
Levels of Poverty, Impoverishment, and Deprivation
A comprehensive report on Egypt was issued as the Poverty Assessment Update in 2007,
which looks at the same survey time periods as El Laithy and Kheir El Din’s research.
The Ministry of Economic Development and the World Bank developed this study,
emphasizing the necessity for some kind of agreement on poverty measurement in Egypt.
The assessment conceded that, while no single method to accurately indicate or measure
poverty exists, it was important not to confine poverty within the framework of only
measuring limited income. In order to comprehensively measure the state of deprivation,
one should use the multiple dimensions of indicators and data into account.
The Poverty Assessment Update attempts to obtain a general consensus on poverty
measurement with statistical and analytical support from Ravallion, El Laithy, Lokshin,
and Banerji’s research, as well as prior research on the subject from the World Bank
archives. It claims self-accuracy by using local prices and poverty lines adjusted to
household demographics throughout the report.
This poverty assessment uses three primary aggregate measures to account for the
‘multidimensionality’ of poverty.69 First, the head count index measures the prevalence of
poverty determined by a poverty line. It shows the percentage of poor as a proportion of
the total population. However, this indicator does not reflect the dynamics of distribution
of the poor that exist below the poverty line, but simply paints a static picture of poor vs.
non-poor. Second, the poverty gap index calculates the depth and magnitude of poverty—
the gap between low-income expenditure levels and the poverty line. Lastly, the poverty
severity index measures the degree of inequality in the distribution below the poverty
line, giving a greater weight to households at the bottom of expenditure or income
distribution.
Instead of setting a standard income or consumption line which is often used in
research on this subject, the assessment classifies poverty into three groups: extreme,
absolute, and near poverty. These three groups combined constitute the poor. Each
category has its own poverty line and is assessed by comparing household consumption
by HIECS representative survey. In 2005 dollar values, one dollar purchasing power
parity (PPP) is the equivalent to 2.57 Egyptian pounds. Dollars with the same purchasing
power in the United States, when conflated with goods and services, are more expensive
in the US, one PPP dollar per day is equivalent of much less than a current exchange rate
would imply. Those classified as extremely poor are considered as individuals who spend
less than 995 Egyptian pounds (in 2005 PPP value) per year. Absolute poor is classified as
those spending less than 1,423 pounds per year. Those who are near poor spend between
1,424 and 1,854 pounds per year. One can expand on this approach by breaking the
estimated poverty lines even further to account for age, gender, region, and household
size.
While previous poverty measurements ignored the significant differences in
consumption patterns and prices across the region, the assessment uses a cost-of-
basicneeds methodology in order to establish subsistence minimums. For example, it is
crucial for accuracy to account for different requirements of different household
members, to take economies of scale within the household into account, as well as to
consider that non-food items can be shared among household members. The methodology
used in this report can account for the problems with previous poverty research in Egypt.
Accordingly, Egypt follows an absolute poverty line with a focus on those who are
deprived of the ‘most basic needs,’ rather than those who potentially face deprivation
relative to their fellow citizens. Using the PPP exchange rate as a set value for the 95/96,
99/00, and 04/05 surveys, two internationally standard poverty lines are used in this
report. This allows for a broader understanding of the circumstances of minimum living
standards, defined as 1$ a day, and those who are more prone or vulnerable to poverty
denoted by 2$ a day.
In combining this poverty line with total poverty line, the food poverty line is
supplemented by an allowance for expenditure for essential non-food goods. The price of
non-food expenses is estimated by identifying the share of non-food expenditure for
households whose total expenditure was equivalent to the food poverty line. Poverty rates
are based on comparisons between actual expenditure and the cost of a consumption
basket securing 2,470 calories per day per person, along with some additional basic
services.
This report thus concludes that approximately forty percent of the population in
Egypt is clustered between one and two dollars per capita a day. It also notes that in
examining the poverty trends from 1996-2005, the poverty rate was 19.4% in 1996,
16.7% in 2000, and 19.6% in 2005. This confirms El Laithy and Kheir El Din’s estimates.
The assessment further reports that those who faced extreme poverty were at 2% in 1996,
2.9% in 2000, and 3.8% in 2005. Those that were near poverty were at 32% in 1996,
25.9% in 2000, and 29.9 percent in 2005. The poverty gap index was 3.4% in 1996, 3.0%
in 2000, and 3.6% in 2005. The poverty severity index was at 2% in 1996, 2.9% in 2000,
and 3.8% in 2005. These conclusions represent the overall poverty profile of Egypt during
this time period.
Furthermore, one can expand on the differences between deprivation and severe
deprivation. For example, according to Gordon’s deprivation scale, if an individual has a
body mass index under 16, they are severely underweight and therefore represent the
element of severe deprivation. The scale moves up to a body mass index of 18.5, anything
below this threshold would represent deprivation. Using the BMI to calculate health and
nourishment is useful. While it does not take into account individual preference, nutrition,
or food baskets, it does provide a general idea of a person’s health by using their height
and weight and oftentimes, age and gender. Clearly, there are variations for standard or
optimal BMI and this measure has many limitations. However, because the cut off for
severe deprivation is staggered to a very low BMI number, it can be very practical when
used with other deprivation indicators.
His scale also elaborates on specific criteria to determine the standards of his
scale. Each one differentiates between deprivation and severe deprivation. Although his
criteria are useful for understanding general thresholds for deprivation and severe
deprivation, they ignore a crucial factor, the perception of poverty.
In perceiving poverty on any scale, the role of inequality cannot be ignored.
Inequality can intensify poverty, not only in terms of statistical facts, but in opinions of
circumstance as well. If an individual is living in deprivation, that deprivation can seem
exaggerated if his neighbor is living in luxury. Therefore, the perception of poverty
cannot be ignored when looking at levels of deprivation.
Within any given community, certain individuals may not perceive themselves as
poor at all, even though they might not have access to health or educational facilities or
they live in mud floor houses without modern sanitation. By most standards, this would
constitute an extreme level of poverty. But if most of the community lived within these
same sets of living or social circumstances, their own interpretation of poverty would be
limited to their direct experience. For example, if everyone in an indigenous tribe in
South America lived in mud huts and used the local river for sustenance, inequality does
not seem readily apparent. There is not a large discrepancy between the different groups
in the tribe (although power and politics within any society are bound to play a role).
However if a particular few of that group have access to other facilities or modern
technology, or are even aware that it exists regardless of their lifestyle, they may perceive
their situation as more unequal and more dire than otherwise
For example, indigenous populations in South America may not view themselves
as living in severe poverty although they could potentially fall under that category
according to Gordon’s eight criteria. Some of these groups use rivers and ponds instead of
modern plumbing. They have no access to healthcare; they live in houses with mud floors
or no floors at all; they share space with four or more people per room; they have no
access to newspapers, radios, computers, or other modern information sources. While
many of these things may be true for large groups of marginalized peoples in societies,
they do not automatically infer severe poverty. These criteria are largely based on a
modern Western version of deprivation and minimum living standards, enhanced by
inequalities in a society. You cannot be a “have not” if you are not exposed to certain
assets that would allow you to “have” something in the first place.
Vulnerability
There are certain freedoms, choices, and rights that limit a person in poverty.
Deprivation reflects vulnerability; the poor are often at risk in terms of health, education,
social stability, or ill treatment and abuse by society or the state. The vulnerability
dimension is usually due to events in which an individual has no control. For example,
violence, disease, economic shocks and natural disasters all reinforce a person’s attitude
towards his own perception of poverty. Vulnerability, in this aspect, “exacerbates material
poverty and weakens their bargaining position” of groups at risk. The poor often have no
voice, control, or representation in their personal development. Vulnerability represents
the risk a household has of falling into poverty. These groups often fall into poverty
clusters and are highly sensitive to shocks such as emergency medical expenses, lost jobs,
natural disasters, bad business profits, etc. Vulnerability can be mitigated through giving
at-risk groups of society empowerment and their opportunities and security. Vulnerability
is crucial in the experience and processes of poverty.
Interpretation and Perception of Poverty
Interpretations of poverty and poorness are subjective. What constitutes poverty to
one individual may be perceived differently to another. Different poverty thresholds can
be determined by subjective poverty lines, which depend on the personal judgment of an
individual or household’s standard of living. The benefit of this threshold is that it
identifies poverty measurement as an intrinsically deduced judgment by a person of what
is acceptable as minimum living standard. Subjective poverty is more dependent on
personal perception and considerations by the population that is being measured. For
example, if the inequality rate is high in a country, the bottom quadrant of the population
may not be living in actual poverty. This group may perceive their poverty based on
comparisons to those with better living standards. Subjective poverty is an important
measure, but it can be problematic as it is inherently subject to individual preferences of
basic needs. These preferences are dynamic and differ based on relative criteria, such as
individual taste, location, gender, occupation, and price variations.
The perception of poverty plays an important role in understanding
impoverishment. A person’s individual perception of his own poverty greatly influences
his level of deprivation. A government’s perception of poverty would obviously play an
enormous role in determining social and welfare policy.
Subjective factors such as interpretation, poverty measurement, or methods for
quantifying growth demonstrate how poverty measures are conditional on the perception
of one’s understanding of poverty. This can be demonstrated by the nature and scale of
poverty studies in Egypt. Poverty analysis in Egypt differs widely in magnitude,
distribution, and incidence, illustrated by the various conflicting representations of
poverty in Egypt among current scholarship and research. Even more interesting is that
the majority of work on poverty in Egypt stems from the exact same survey data produced
by the Central Agency for Public Mobilization and Statistics and the Egyptian
government. Yet, although the data from CAPMAS is the only officially available data on
poverty figures in Egypt, different institutions, economists, and social researchers have
put a subjective spin on the overall results, painting a confusing and rather incoherent
picture of poverty in Egypt. This conflict arises from the different methodologies and
poverty lines used to indicate social welfare. Frequently, it is merely a minor change in
percentages of poverty measurement indexes. However, in the broader situation, millions
of people might be ignored or incorrectly aggregated into an author’s subjective category
of poverty.
Poverty in the Egyptian Context:
Poverty Research and Methodologies in Egypt
When considering the effects of political policy, economic reform, and social funding
directed toward welfare and well being in developing countries, policy formation should
focus on the importance of objective poverty research and accountability.
Poverty analysis and scholarship in Egypt are gathered from many different
authorities; from institutions such as the World Bank or IFPRI, private researchers,
Egyptian economists or other political economy scientists researching poverty statistics.
Most of these reports use primary data from Household Income Expenditure and
Consumption Surveys (HIECS) conducted by CAPMAS, the official statistical agency in
Egypt. These surveys began in 1957 by the Egyptian government but were conducted on
an irregular basis in 1964/65, 1974/75, and 1981/982. It was not until 1990 that
CAPMAS began issuing the surveys every 5 years.
While these surveys are useful in understanding broad trends in poverty in Egypt,
they have significant limitations. First, nutritional and food related data is not readily
available. Second, the results and methods of calculating individual diets, which vary
between differing ages, sexes, occupation, and geography, are ambiguous, leading many
poverty researchers to use their own interpretive methodologies to calculate the
magnitude and dimensions of poverty. Third, the Institute of National Planning and
CAPMAS did not release their surveys in an individual household form nor did they
specify these differences and relative measurements. Furthermore, it is also unclear how
CAPMAS accounted for regional variations with food and non-food pricing, which would
clearly impact the construction of expenditure-based poverty lines. Finally, all of the
poverty lines utilized are based on consumer expenditure data, which does not account for
saving or borrowing from other sources.
As previously mentioned, the most consistent source of poverty analysis and
measurement comes from the Household, Income, Expenditure, and Consumption
Surveys for the years 1990/91, 1995/96, 1999/00, and 2004/05. These surveys were
administrated through CAPMAS using household specific poverty lines, including both a
standardized food and a nonfood poverty line. Economists Hanaa Kheir el Din and Heba
el-Laithy analyzed these surveys in conjunction with poverty-related data from the
Ministry of Economic Development, CAPMAS, and the World Bank databases. The data
is useful in observing patterns of growth and poverty in Egypt during this period.
1990 marks the initial period of consistent CAMPAS studies which were then
surveyed and issued every five years. According to the Poverty Assessment Update, these
surveys consist of large samples drawn from the whole country and contain data on
income/consumption and expenditures on over 600 items of goods and services. They
provide “a good source of information on the distribution of welfare within Egyptian
society.” Second, the continuity of data is important both for accuracy and consistency,
although during this period, there was limited methodical or empirical data available from
official sources. No nationally representative unit level data was available for public
usage from either government or private sources. Most of the scholars who analyze and
report poverty statistics on Egypt note this lack of formal or reliable data for poverty and
inequality.
According to El Laithy and Kheir El Din’s results, poverty—including measures
such as depth, severity, incidence, etc.—declined during the second half of the nineties.
This was an indirect result of the drastic GDP growth in 1994/95 compared to earlier
years, particularly with regard to extremely high incidences of poverty in Egypt
throughout the 1980’s. According to the author’s estimates and information from the
HIECS, the results were interpreted using poverty indicators that represented a person’s
ability to obtain basic food and nonfood needs. This was based on individual per capita
poverty lines and then measured and calculated using household poverty lines. The
incidence, depth, and severity of poverty were calculated by using aggregate poverty
measures from 1990 to 2005. According to this data, poverty fell from 24.18% of the
population in 1990/91 to 19.41% in 1995/96. It decreased further from 19.41% to 16.74%
in 1999/00. The poverty rate then increased from 16.74 to 19.56 percent in 2004/05. The
data also showed that both the depth and severity of poverty followed similar patterns.
Both measures decreased dramatically from 1990/91 to 1995/96, dropped further in
1999/00, and then increased in 2004/05.
In terms of household income inequality the gini coefficient (the measure of
inequality of wealth) decreased from 1990/91 to 1995/96 which indicated a better
distribution of wealth. From 1995/96 to 1999/00, the gini coefficient increased slightly
which demonstrated an increase of wealth inequality. However, from 1999/00 to 2004/05,
inequality decreased to its lowest relative level in the 15-year period. Inequality was
lowest in 2004/05, suggesting a more equitable distribution of wealth and a smaller
poverty gap. If this information is marginally correct, one could arguably conclude that
income distribution has improved from 1990-2005. This data, compared with the survey
data, provides a general and approximate conceptualization of poverty in Egypt.
Poverty in Egypt
When discussing ultra poverty, extreme impoverishment, and absolute poor groups in a
society, one is talking about the highly marginalized, vulnerable, and high-risk social
groups. In Datt, Joliffe, and Sharma’s profile of poverty in Egypt, they note some of the
common characteristics of those living in severe impoverishment. They use per capita
consumption as a measure of individual welfare to reflect individual preferences
conditional on prices and incomes. They also incorporate regional differences, size and
age composition of households and nonfood consumption preferences for relatively poor
households to portray a comprehensive profile of the levels of poverty in Egypt.
Accordingly, in 1997, about 15.7 million or 26.5 percent of the population in Egypt was
classified as poor. Within this group of poor, 5.1 million were determined to be living in
absolute poverty or ultra poor. While the poverty gap index and headcount index did not
show the severity of poverty, the poverty-gap and squared-poverty-gap indexes are the
worst in the rural regions. However the Gini coefficient is worse in the urban areas.
Datt and Joliffe’s research in Egypt correlate with some demographic
generalizations in poverty indicators and comparisons. For example, some of the poorest
households have larger households and higher dependency ratios. These households have
members who are between the ages of 0-15 or over 60 and would not traditionally
contribute to the sustainability and management of a household. Instead they depend on
other members of the family for financial, economic, and social support. Extreme poor
household compositions typically are larger than poor households with an average 8
family members while poor households are around 5.4 members. Female-headed
households are also vulnerable and are at risk to live in absolute impoverishment. The
ultra poor have a much higher percentage of family members who do not complete
primary school. Most work as casual wage laborers; employment that is rarely consistent
and highly vulnerable to shocks. Absolute poverty is prevalent in rural areas, specifically
Upper Egypt. About seventy-four percent of the ultra poor population lives in rural areas.
Levels of Poverty, Impoverishment, and Deprivation
A comprehensive report on Egypt was issued as the Poverty Assessment Update in 2007,
which looks at the same survey time periods as El Laithy and Kheir El Din’s research.
The Ministry of Economic Development and the World Bank developed this study,
emphasizing the necessity for some kind of agreement on poverty measurement in Egypt.
The assessment conceded that, while no single method to accurately indicate or measure
poverty exists, it was important not to confine poverty within the framework of only
measuring limited income. In order to comprehensively measure the state of deprivation,
one should use the multiple dimensions of indicators and data into account.
The Poverty Assessment Update attempts to obtain a general consensus on poverty
measurement with statistical and analytical support from Ravallion, El Laithy, Lokshin,
and Banerji’s research, as well as prior research on the subject from the World Bank
archives. It claims self-accuracy by using local prices and poverty lines adjusted to
household demographics throughout the report.
This poverty assessment uses three primary aggregate measures to account for the
‘multidimensionality’ of poverty.69 First, the head count index measures the prevalence of
poverty determined by a poverty line. It shows the percentage of poor as a proportion of
the total population. However, this indicator does not reflect the dynamics of distribution
of the poor that exist below the poverty line, but simply paints a static picture of poor vs.
non-poor. Second, the poverty gap index calculates the depth and magnitude of poverty—
the gap between low-income expenditure levels and the poverty line. Lastly, the poverty
severity index measures the degree of inequality in the distribution below the poverty
line, giving a greater weight to households at the bottom of expenditure or income
distribution.
Instead of setting a standard income or consumption line which is often used in
research on this subject, the assessment classifies poverty into three groups: extreme,
absolute, and near poverty. These three groups combined constitute the poor. Each
category has its own poverty line and is assessed by comparing household consumption
by HIECS representative survey. In 2005 dollar values, one dollar purchasing power
parity (PPP) is the equivalent to 2.57 Egyptian pounds. Dollars with the same purchasing
power in the United States, when conflated with goods and services, are more expensive
in the US, one PPP dollar per day is equivalent of much less than a current exchange rate
would imply. Those classified as extremely poor are considered as individuals who spend
less than 995 Egyptian pounds (in 2005 PPP value) per year. Absolute poor is classified as
those spending less than 1,423 pounds per year. Those who are near poor spend between
1,424 and 1,854 pounds per year. One can expand on this approach by breaking the
estimated poverty lines even further to account for age, gender, region, and household
size.
While previous poverty measurements ignored the significant differences in
consumption patterns and prices across the region, the assessment uses a cost-of-
basicneeds methodology in order to establish subsistence minimums. For example, it is
crucial for accuracy to account for different requirements of different household
members, to take economies of scale within the household into account, as well as to
consider that non-food items can be shared among household members. The methodology
used in this report can account for the problems with previous poverty research in Egypt.
Accordingly, Egypt follows an absolute poverty line with a focus on those who are
deprived of the ‘most basic needs,’ rather than those who potentially face deprivation
relative to their fellow citizens. Using the PPP exchange rate as a set value for the 95/96,
99/00, and 04/05 surveys, two internationally standard poverty lines are used in this
report. This allows for a broader understanding of the circumstances of minimum living
standards, defined as 1$ a day, and those who are more prone or vulnerable to poverty
denoted by 2$ a day.
In combining this poverty line with total poverty line, the food poverty line is
supplemented by an allowance for expenditure for essential non-food goods. The price of
non-food expenses is estimated by identifying the share of non-food expenditure for
households whose total expenditure was equivalent to the food poverty line. Poverty rates
are based on comparisons between actual expenditure and the cost of a consumption
basket securing 2,470 calories per day per person, along with some additional basic
services.
This report thus concludes that approximately forty percent of the population in
Egypt is clustered between one and two dollars per capita a day. It also notes that in
examining the poverty trends from 1996-2005, the poverty rate was 19.4% in 1996,
16.7% in 2000, and 19.6% in 2005. This confirms El Laithy and Kheir El Din’s estimates.
The assessment further reports that those who faced extreme poverty were at 2% in 1996,
2.9% in 2000, and 3.8% in 2005. Those that were near poverty were at 32% in 1996,
25.9% in 2000, and 29.9 percent in 2005. The poverty gap index was 3.4% in 1996, 3.0%
in 2000, and 3.6% in 2005. The poverty severity index was at 2% in 1996, 2.9% in 2000,
and 3.8% in 2005. These conclusions represent the overall poverty profile of Egypt during
this time period.
Furthermore, one can expand on the differences between deprivation and severe
deprivation. For example, according to Gordon’s deprivation scale, if an individual has a
body mass index under 16, they are severely underweight and therefore represent the
element of severe deprivation. The scale moves up to a body mass index of 18.5, anything
below this threshold would represent deprivation. Using the BMI to calculate health and
nourishment is useful. While it does not take into account individual preference, nutrition,
or food baskets, it does provide a general idea of a person’s health by using their height
and weight and oftentimes, age and gender. Clearly, there are variations for standard or
optimal BMI and this measure has many limitations. However, because the cut off for
severe deprivation is staggered to a very low BMI number, it can be very practical when
used with other deprivation indicators.
His scale also elaborates on specific criteria to determine the standards of his
scale. Each one differentiates between deprivation and severe deprivation. Although his
criteria are useful for understanding general thresholds for deprivation and severe
deprivation, they ignore a crucial factor, the perception of poverty.
In perceiving poverty on any scale, the role of inequality cannot be ignored.
Inequality can intensify poverty, not only in terms of statistical facts, but in opinions of
circumstance as well. If an individual is living in deprivation, that deprivation can seem
exaggerated if his neighbor is living in luxury. Therefore, the perception of poverty
cannot be ignored when looking at levels of deprivation.
Within any given community, certain individuals may not perceive themselves as
poor at all, even though they might not have access to health or educational facilities or
they live in mud floor houses without modern sanitation. By most standards, this would
constitute an extreme level of poverty. But if most of the community lived within these
same sets of living or social circumstances, their own interpretation of poverty would be
limited to their direct experience. For example, if everyone in an indigenous tribe in
South America lived in mud huts and used the local river for sustenance, inequality does
not seem readily apparent. There is not a large discrepancy between the different groups
in the tribe (although power and politics within any society are bound to play a role).
However if a particular few of that group have access to other facilities or modern
technology, or are even aware that it exists regardless of their lifestyle, they may perceive
their situation as more unequal and more dire than otherwise
For example, indigenous populations in South America may not view themselves
as living in severe poverty although they could potentially fall under that category
according to Gordon’s eight criteria. Some of these groups use rivers and ponds instead of
modern plumbing. They have no access to healthcare; they live in houses with mud floors
or no floors at all; they share space with four or more people per room; they have no
access to newspapers, radios, computers, or other modern information sources. While
many of these things may be true for large groups of marginalized peoples in societies,
they do not automatically infer severe poverty. These criteria are largely based on a
modern Western version of deprivation and minimum living standards, enhanced by
inequalities in a society. You cannot be a “have not” if you are not exposed to certain
assets that would allow you to “have” something in the first place.
Vulnerability
There are certain freedoms, choices, and rights that limit a person in poverty.
Deprivation reflects vulnerability; the poor are often at risk in terms of health, education,
social stability, or ill treatment and abuse by society or the state. The vulnerability
dimension is usually due to events in which an individual has no control. For example,
violence, disease, economic shocks and natural disasters all reinforce a person’s attitude
towards his own perception of poverty. Vulnerability, in this aspect, “exacerbates material
poverty and weakens their bargaining position” of groups at risk. The poor often have no
voice, control, or representation in their personal development. Vulnerability represents
the risk a household has of falling into poverty. These groups often fall into poverty
clusters and are highly sensitive to shocks such as emergency medical expenses, lost jobs,
natural disasters, bad business profits, etc. Vulnerability can be mitigated through giving
at-risk groups of society empowerment and their opportunities and security. Vulnerability
is crucial in the experience and processes of poverty.
Interpretation and Perception of Poverty
Interpretations of poverty and poorness are subjective. What constitutes poverty to
one individual may be perceived differently to another. Different poverty thresholds can
be determined by subjective poverty lines, which depend on the personal judgment of an
individual or household’s standard of living. The benefit of this threshold is that it
identifies poverty measurement as an intrinsically deduced judgment by a person of what
is acceptable as minimum living standard. Subjective poverty is more dependent on
personal perception and considerations by the population that is being measured. For
example, if the inequality rate is high in a country, the bottom quadrant of the population
may not be living in actual poverty. This group may perceive their poverty based on
comparisons to those with better living standards. Subjective poverty is an important
measure, but it can be problematic as it is inherently subject to individual preferences of
basic needs. These preferences are dynamic and differ based on relative criteria, such as
individual taste, location, gender, occupation, and price variations.
The perception of poverty plays an important role in understanding
impoverishment. A person’s individual perception of his own poverty greatly influences
his level of deprivation. A government’s perception of poverty would obviously play an
enormous role in determining social and welfare policy.
Subjective factors such as interpretation, poverty measurement, or methods for
quantifying growth demonstrate how poverty measures are conditional on the perception
of one’s understanding of poverty. This can be demonstrated by the nature and scale of
poverty studies in Egypt. Poverty analysis in Egypt differs widely in magnitude,
distribution, and incidence, illustrated by the various conflicting representations of
poverty in Egypt among current scholarship and research. Even more interesting is that
the majority of work on poverty in Egypt stems from the exact same survey data produced
by the Central Agency for Public Mobilization and Statistics and the Egyptian
government. Yet, although the data from CAPMAS is the only officially available data on
poverty figures in Egypt, different institutions, economists, and social researchers have
put a subjective spin on the overall results, painting a confusing and rather incoherent
picture of poverty in Egypt. This conflict arises from the different methodologies and
poverty lines used to indicate social welfare. Frequently, it is merely a minor change in
percentages of poverty measurement indexes. However, in the broader situation, millions
of people might be ignored or incorrectly aggregated into an author’s subjective category
of poverty.
Poverty in the Egyptian Context:
Poverty Research and Methodologies in Egypt
When considering the effects of political policy, economic reform, and social funding
directed toward welfare and well being in developing countries, policy formation should
focus on the importance of objective poverty research and accountability.
Poverty analysis and scholarship in Egypt are gathered from many different
authorities; from institutions such as the World Bank or IFPRI, private researchers,
Egyptian economists or other political economy scientists researching poverty statistics.
Most of these reports use primary data from Household Income Expenditure and
Consumption Surveys (HIECS) conducted by CAPMAS, the official statistical agency in
Egypt. These surveys began in 1957 by the Egyptian government but were conducted on
an irregular basis in 1964/65, 1974/75, and 1981/982. It was not until 1990 that
CAPMAS began issuing the surveys every 5 years.
While these surveys are useful in understanding broad trends in poverty in Egypt,
they have significant limitations. First, nutritional and food related data is not readily
available. Second, the results and methods of calculating individual diets, which vary
between differing ages, sexes, occupation, and geography, are ambiguous, leading many
poverty researchers to use their own interpretive methodologies to calculate the
magnitude and dimensions of poverty. Third, the Institute of National Planning and
CAPMAS did not release their surveys in an individual household form nor did they
specify these differences and relative measurements. Furthermore, it is also unclear how
CAPMAS accounted for regional variations with food and non-food pricing, which would
clearly impact the construction of expenditure-based poverty lines. Finally, all of the
poverty lines utilized are based on consumer expenditure data, which does not account for
saving or borrowing from other sources.
As previously mentioned, the most consistent source of poverty analysis and
measurement comes from the Household, Income, Expenditure, and Consumption
Surveys for the years 1990/91, 1995/96, 1999/00, and 2004/05. These surveys were
administrated through CAPMAS using household specific poverty lines, including both a
standardized food and a nonfood poverty line. Economists Hanaa Kheir el Din and Heba
el-Laithy analyzed these surveys in conjunction with poverty-related data from the
Ministry of Economic Development, CAPMAS, and the World Bank databases. The data
is useful in observing patterns of growth and poverty in Egypt during this period.
1990 marks the initial period of consistent CAMPAS studies which were then
surveyed and issued every five years. According to the Poverty Assessment Update, these
surveys consist of large samples drawn from the whole country and contain data on
income/consumption and expenditures on over 600 items of goods and services. They
provide “a good source of information on the distribution of welfare within Egyptian
society.” Second, the continuity of data is important both for accuracy and consistency,
although during this period, there was limited methodical or empirical data available from
official sources. No nationally representative unit level data was available for public
usage from either government or private sources. Most of the scholars who analyze and
report poverty statistics on Egypt note this lack of formal or reliable data for poverty and
inequality.
According to El Laithy and Kheir El Din’s results, poverty—including measures
such as depth, severity, incidence, etc.—declined during the second half of the nineties.
This was an indirect result of the drastic GDP growth in 1994/95 compared to earlier
years, particularly with regard to extremely high incidences of poverty in Egypt
throughout the 1980’s. According to the author’s estimates and information from the
HIECS, the results were interpreted using poverty indicators that represented a person’s
ability to obtain basic food and nonfood needs. This was based on individual per capita
poverty lines and then measured and calculated using household poverty lines. The
incidence, depth, and severity of poverty were calculated by using aggregate poverty
measures from 1990 to 2005. According to this data, poverty fell from 24.18% of the
population in 1990/91 to 19.41% in 1995/96. It decreased further from 19.41% to 16.74%
in 1999/00. The poverty rate then increased from 16.74 to 19.56 percent in 2004/05. The
data also showed that both the depth and severity of poverty followed similar patterns.
Both measures decreased dramatically from 1990/91 to 1995/96, dropped further in
1999/00, and then increased in 2004/05.
In terms of household income inequality the gini coefficient (the measure of
inequality of wealth) decreased from 1990/91 to 1995/96 which indicated a better
distribution of wealth. From 1995/96 to 1999/00, the gini coefficient increased slightly
which demonstrated an increase of wealth inequality. However, from 1999/00 to 2004/05,
inequality decreased to its lowest relative level in the 15-year period. Inequality was
lowest in 2004/05, suggesting a more equitable distribution of wealth and a smaller
poverty gap. If this information is marginally correct, one could arguably conclude that
income distribution has improved from 1990-2005. This data, compared with the survey
data, provides a general and approximate conceptualization of poverty in Egypt.
Poverty in Egypt
When discussing ultra poverty, extreme impoverishment, and absolute poor groups in a
society, one is talking about the highly marginalized, vulnerable, and high-risk social
groups. In Datt, Joliffe, and Sharma’s profile of poverty in Egypt, they note some of the
common characteristics of those living in severe impoverishment. They use per capita
consumption as a measure of individual welfare to reflect individual preferences
conditional on prices and incomes. They also incorporate regional differences, size and
age composition of households and nonfood consumption preferences for relatively poor
households to portray a comprehensive profile of the levels of poverty in Egypt.
Accordingly, in 1997, about 15.7 million or 26.5 percent of the population in Egypt was
classified as poor. Within this group of poor, 5.1 million were determined to be living in
absolute poverty or ultra poor. While the poverty gap index and headcount index did not
show the severity of poverty, the poverty-gap and squared-poverty-gap indexes are the
worst in the rural regions. However the Gini coefficient is worse in the urban areas.
Datt and Joliffe’s research in Egypt correlate with some demographic
generalizations in poverty indicators and comparisons. For example, some of the poorest
households have larger households and higher dependency ratios. These households have
members who are between the ages of 0-15 or over 60 and would not traditionally
contribute to the sustainability and management of a household. Instead they depend on
other members of the family for financial, economic, and social support. Extreme poor
household compositions typically are larger than poor households with an average 8
family members while poor households are around 5.4 members. Female-headed
households are also vulnerable and are at risk to live in absolute impoverishment. The
ultra poor have a much higher percentage of family members who do not complete
primary school. Most work as casual wage laborers; employment that is rarely consistent
and highly vulnerable to shocks. Absolute poverty is prevalent in rural areas, specifically
Upper Egypt. About seventy-four percent of the ultra poor population lives in rural areas.
Levels of Poverty, Impoverishment, and Deprivation
A comprehensive report on Egypt was issued as the Poverty Assessment Update in 2007,
which looks at the same survey time periods as El Laithy and Kheir El Din’s research.
The Ministry of Economic Development and the World Bank developed this study,
emphasizing the necessity for some kind of agreement on poverty measurement in Egypt.
The assessment conceded that, while no single method to accurately indicate or measure
poverty exists, it was important not to confine poverty within the framework of only
measuring limited income. In order to comprehensively measure the state of deprivation,
one should use the multiple dimensions of indicators and data into account.
The Poverty Assessment Update attempts to obtain a general consensus on poverty
measurement with statistical and analytical support from Ravallion, El Laithy, Lokshin,
and Banerji’s research, as well as prior research on the subject from the World Bank
archives. It claims self-accuracy by using local prices and poverty lines adjusted to
household demographics throughout the report.
This poverty assessment uses three primary aggregate measures to account for the
‘multidimensionality’ of poverty.69 First, the head count index measures the prevalence of
poverty determined by a poverty line. It shows the percentage of poor as a proportion of
the total population. However, this indicator does not reflect the dynamics of distribution
of the poor that exist below the poverty line, but simply paints a static picture of poor vs.
non-poor. Second, the poverty gap index calculates the depth and magnitude of poverty—
the gap between low-income expenditure levels and the poverty line. Lastly, the poverty
severity index measures the degree of inequality in the distribution below the poverty
line, giving a greater weight to households at the bottom of expenditure or income
distribution.
Instead of setting a standard income or consumption line which is often used in
research on this subject, the assessment classifies poverty into three groups: extreme,
absolute, and near poverty. These three groups combined constitute the poor. Each
category has its own poverty line and is assessed by comparing household consumption
by HIECS representative survey. In 2005 dollar values, one dollar purchasing power
parity (PPP) is the equivalent to 2.57 Egyptian pounds. Dollars with the same purchasing
power in the United States, when conflated with goods and services, are more expensive
in the US, one PPP dollar per day is equivalent of much less than a current exchange rate
would imply. Those classified as extremely poor are considered as individuals who spend
less than 995 Egyptian pounds (in 2005 PPP value) per year. Absolute poor is classified as
those spending less than 1,423 pounds per year. Those who are near poor spend between
1,424 and 1,854 pounds per year. One can expand on this approach by breaking the
estimated poverty lines even further to account for age, gender, region, and household
size.
While previous poverty measurements ignored the significant differences in
consumption patterns and prices across the region, the assessment uses a cost-of-
basicneeds methodology in order to establish subsistence minimums. For example, it is
crucial for accuracy to account for different requirements of different household
members, to take economies of scale within the household into account, as well as to
consider that non-food items can be shared among household members. The methodology
used in this report can account for the problems with previous poverty research in Egypt.
Accordingly, Egypt follows an absolute poverty line with a focus on those who are
deprived of the ‘most basic needs,’ rather than those who potentially face deprivation
relative to their fellow citizens. Using the PPP exchange rate as a set value for the 95/96,
99/00, and 04/05 surveys, two internationally standard poverty lines are used in this
report. This allows for a broader understanding of the circumstances of minimum living
standards, defined as 1$ a day, and those who are more prone or vulnerable to poverty
denoted by 2$ a day.
In combining this poverty line with total poverty line, the food poverty line is
supplemented by an allowance for expenditure for essential non-food goods. The price of
non-food expenses is estimated by identifying the share of non-food expenditure for
households whose total expenditure was equivalent to the food poverty line. Poverty rates
are based on comparisons between actual expenditure and the cost of a consumption
basket securing 2,470 calories per day per person, along with some additional basic
services.
This report thus concludes that approximately forty percent of the population in
Egypt is clustered between one and two dollars per capita a day. It also notes that in
examining the poverty trends from 1996-2005, the poverty rate was 19.4% in 1996,
16.7% in 2000, and 19.6% in 2005. This confirms El Laithy and Kheir El Din’s estimates.
The assessment further reports that those who faced extreme poverty were at 2% in 1996,
2.9% in 2000, and 3.8% in 2005. Those that were near poverty were at 32% in 1996,
25.9% in 2000, and 29.9 percent in 2005. The poverty gap index was 3.4% in 1996, 3.0%
in 2000, and 3.6% in 2005. The poverty severity index was at 2% in 1996, 2.9% in 2000,
and 3.8% in 2005. These conclusions represent the overall poverty profile of Egypt during
this time period.
Furthermore, one can expand on the differences between deprivation and severe
deprivation. For example, according to Gordon’s deprivation scale, if an individual has a
body mass index under 16, they are severely underweight and therefore represent the
element of severe deprivation. The scale moves up to a body mass index of 18.5, anything
below this threshold would represent deprivation. Using the BMI to calculate health and
nourishment is useful. While it does not take into account individual preference, nutrition,
or food baskets, it does provide a general idea of a person’s health by using their height
and weight and oftentimes, age and gender. Clearly, there are variations for standard or
optimal BMI and this measure has many limitations. However, because the cut off for
severe deprivation is staggered to a very low BMI number, it can be very practical when
used with other deprivation indicators.
His scale also elaborates on specific criteria to determine the standards of his
scale. Each one differentiates between deprivation and severe deprivation. Although his
criteria are useful for understanding general thresholds for deprivation and severe
deprivation, they ignore a crucial factor, the perception of poverty.
In perceiving poverty on any scale, the role of inequality cannot be ignored.
Inequality can intensify poverty, not only in terms of statistical facts, but in opinions of
circumstance as well. If an individual is living in deprivation, that deprivation can seem
exaggerated if his neighbor is living in luxury. Therefore, the perception of poverty
cannot be ignored when looking at levels of deprivation.
Within any given community, certain individuals may not perceive themselves as
poor at all, even though they might not have access to health or educational facilities or
they live in mud floor houses without modern sanitation. By most standards, this would
constitute an extreme level of poverty. But if most of the community lived within these
same sets of living or social circumstances, their own interpretation of poverty would be
limited to their direct experience. For example, if everyone in an indigenous tribe in
South America lived in mud huts and used the local river for sustenance, inequality does
not seem readily apparent. There is not a large discrepancy between the different groups
in the tribe (although power and politics within any society are bound to play a role).
However if a particular few of that group have access to other facilities or modern
technology, or are even aware that it exists regardless of their lifestyle, they may perceive
their situation as more unequal and more dire than otherwise
For example, indigenous populations in South America may not view themselves
as living in severe poverty although they could potentially fall under that category
according to Gordon’s eight criteria. Some of these groups use rivers and ponds instead of
modern plumbing. They have no access to healthcare; they live in houses with mud floors
or no floors at all; they share space with four or more people per room; they have no
access to newspapers, radios, computers, or other modern information sources. While
many of these things may be true for large groups of marginalized peoples in societies,
they do not automatically infer severe poverty. These criteria are largely based on a
modern Western version of deprivation and minimum living standards, enhanced by
inequalities in a society. You cannot be a “have not” if you are not exposed to certain
assets that would allow you to “have” something in the first place.
Vulnerability
There are certain freedoms, choices, and rights that limit a person in poverty.
Deprivation reflects vulnerability; the poor are often at risk in terms of health, education,
social stability, or ill treatment and abuse by society or the state. The vulnerability
dimension is usually due to events in which an individual has no control. For example,
violence, disease, economic shocks and natural disasters all reinforce a person’s attitude
towards his own perception of poverty. Vulnerability, in this aspect, “exacerbates material
poverty and weakens their bargaining position” of groups at risk. The poor often have no
voice, control, or representation in their personal development. Vulnerability represents
the risk a household has of falling into poverty. These groups often fall into poverty
clusters and are highly sensitive to shocks such as emergency medical expenses, lost jobs,
natural disasters, bad business profits, etc. Vulnerability can be mitigated through giving
at-risk groups of society empowerment and their opportunities and security. Vulnerability
is crucial in the experience and processes of poverty.
Interpretation and Perception of Poverty
Interpretations of poverty and poorness are subjective. What constitutes poverty to
one individual may be perceived differently to another. Different poverty thresholds can
be determined by subjective poverty lines, which depend on the personal judgment of an
individual or household’s standard of living. The benefit of this threshold is that it
identifies poverty measurement as an intrinsically deduced judgment by a person of what
is acceptable as minimum living standard. Subjective poverty is more dependent on
personal perception and considerations by the population that is being measured. For
example, if the inequality rate is high in a country, the bottom quadrant of the population
may not be living in actual poverty. This group may perceive their poverty based on
comparisons to those with better living standards. Subjective poverty is an important
measure, but it can be problematic as it is inherently subject to individual preferences of
basic needs. These preferences are dynamic and differ based on relative criteria, such as
individual taste, location, gender, occupation, and price variations.
The perception of poverty plays an important role in understanding
impoverishment. A person’s individual perception of his own poverty greatly influences
his level of deprivation. A government’s perception of poverty would obviously play an
enormous role in determining social and welfare policy.
Subjective factors such as interpretation, poverty measurement, or methods for
quantifying growth demonstrate how poverty measures are conditional on the perception
of one’s understanding of poverty. This can be demonstrated by the nature and scale of
poverty studies in Egypt. Poverty analysis in Egypt differs widely in magnitude,
distribution, and incidence, illustrated by the various conflicting representations of
poverty in Egypt among current scholarship and research. Even more interesting is that
the majority of work on poverty in Egypt stems from the exact same survey data produced
by the Central Agency for Public Mobilization and Statistics and the Egyptian
government. Yet, although the data from CAPMAS is the only officially available data on
poverty figures in Egypt, different institutions, economists, and social researchers have
put a subjective spin on the overall results, painting a confusing and rather incoherent
picture of poverty in Egypt. This conflict arises from the different methodologies and
poverty lines used to indicate social welfare. Frequently, it is merely a minor change in
percentages of poverty measurement indexes. However, in the broader situation, millions
of people might be ignored or incorrectly aggregated into an author’s subjective category
of poverty.
Poverty in the Egyptian Context:
Poverty Research and Methodologies in Egypt
When considering the effects of political policy, economic reform, and social funding
directed toward welfare and well being in developing countries, policy formation should
focus on the importance of objective poverty research and accountability.
Poverty analysis and scholarship in Egypt are gathered from many different
authorities; from institutions such as the World Bank or IFPRI, private researchers,
Egyptian economists or other political economy scientists researching poverty statistics.
Most of these reports use primary data from Household Income Expenditure and
Consumption Surveys (HIECS) conducted by CAPMAS, the official statistical agency in
Egypt. These surveys began in 1957 by the Egyptian government but were conducted on
an irregular basis in 1964/65, 1974/75, and 1981/982. It was not until 1990 that
CAPMAS began issuing the surveys every 5 years.
While these surveys are useful in understanding broad trends in poverty in Egypt,
they have significant limitations. First, nutritional and food related data is not readily
available. Second, the results and methods of calculating individual diets, which vary
between differing ages, sexes, occupation, and geography, are ambiguous, leading many
poverty researchers to use their own interpretive methodologies to calculate the
magnitude and dimensions of poverty. Third, the Institute of National Planning and
CAPMAS did not release their surveys in an individual household form nor did they
specify these differences and relative measurements. Furthermore, it is also unclear how
CAPMAS accounted for regional variations with food and non-food pricing, which would
clearly impact the construction of expenditure-based poverty lines. Finally, all of the
poverty lines utilized are based on consumer expenditure data, which does not account for
saving or borrowing from other sources.
As previously mentioned, the most consistent source of poverty analysis and
measurement comes from the Household, Income, Expenditure, and Consumption
Surveys for the years 1990/91, 1995/96, 1999/00, and 2004/05. These surveys were
administrated through CAPMAS using household specific poverty lines, including both a
standardized food and a nonfood poverty line. Economists Hanaa Kheir el Din and Heba
el-Laithy analyzed these surveys in conjunction with poverty-related data from the
Ministry of Economic Development, CAPMAS, and the World Bank databases. The data
is useful in observing patterns of growth and poverty in Egypt during this period.
1990 marks the initial period of consistent CAMPAS studies which were then
surveyed and issued every five years. According to the Poverty Assessment Update, these
surveys consist of large samples drawn from the whole country and contain data on
income/consumption and expenditures on over 600 items of goods and services. They
provide “a good source of information on the distribution of welfare within Egyptian
society.” Second, the continuity of data is important both for accuracy and consistency,
although during this period, there was limited methodical or empirical data available from
official sources. No nationally representative unit level data was available for public
usage from either government or private sources. Most of the scholars who analyze and
report poverty statistics on Egypt note this lack of formal or reliable data for poverty and
inequality.
According to El Laithy and Kheir El Din’s results, poverty—including measures
such as depth, severity, incidence, etc.—declined during the second half of the nineties.
This was an indirect result of the drastic GDP growth in 1994/95 compared to earlier
years, particularly with regard to extremely high incidences of poverty in Egypt
throughout the 1980’s. According to the author’s estimates and information from the
HIECS, the results were interpreted using poverty indicators that represented a person’s
ability to obtain basic food and nonfood needs. This was based on individual per capita
poverty lines and then measured and calculated using household poverty lines. The
incidence, depth, and severity of poverty were calculated by using aggregate poverty
measures from 1990 to 2005. According to this data, poverty fell from 24.18% of the
population in 1990/91 to 19.41% in 1995/96. It decreased further from 19.41% to 16.74%
in 1999/00. The poverty rate then increased from 16.74 to 19.56 percent in 2004/05. The
data also showed that both the depth and severity of poverty followed similar patterns.
Both measures decreased dramatically from 1990/91 to 1995/96, dropped further in
1999/00, and then increased in 2004/05.
In terms of household income inequality the gini coefficient (the measure of
inequality of wealth) decreased from 1990/91 to 1995/96 which indicated a better
distribution of wealth. From 1995/96 to 1999/00, the gini coefficient increased slightly
which demonstrated an increase of wealth inequality. However, from 1999/00 to 2004/05,
inequality decreased to its lowest relative level in the 15-year period. Inequality was
lowest in 2004/05, suggesting a more equitable distribution of wealth and a smaller
poverty gap. If this information is marginally correct, one could arguably conclude that
income distribution has improved from 1990-2005. This data, compared with the survey
data, provides a general and approximate conceptualization of poverty in Egypt.
Poverty in Egypt
When discussing ultra poverty, extreme impoverishment, and absolute poor groups in a
society, one is talking about the highly marginalized, vulnerable, and high-risk social
groups. In Datt, Joliffe, and Sharma’s profile of poverty in Egypt, they note some of the
common characteristics of those living in severe impoverishment. They use per capita
consumption as a measure of individual welfare to reflect individual preferences
conditional on prices and incomes. They also incorporate regional differences, size and
age composition of households and nonfood consumption preferences for relatively poor
households to portray a comprehensive profile of the levels of poverty in Egypt.
Accordingly, in 1997, about 15.7 million or 26.5 percent of the population in Egypt was
classified as poor. Within this group of poor, 5.1 million were determined to be living in
absolute poverty or ultra poor. While the poverty gap index and headcount index did not
show the severity of poverty, the poverty-gap and squared-poverty-gap indexes are the
worst in the rural regions. However the Gini coefficient is worse in the urban areas.
Datt and Joliffe’s research in Egypt correlate with some demographic
generalizations in poverty indicators and comparisons. For example, some of the poorest
households have larger households and higher dependency ratios. These households have
members who are between the ages of 0-15 or over 60 and would not traditionally
contribute to the sustainability and management of a household. Instead they depend on
other members of the family for financial, economic, and social support. Extreme poor
household compositions typically are larger than poor households with an average 8
family members while poor households are around 5.4 members. Female-headed
households are also vulnerable and are at risk to live in absolute impoverishment. The
ultra poor have a much higher percentage of family members who do not complete
primary school. Most work as casual wage laborers; employment that is rarely consistent
and highly vulnerable to shocks. Absolute poverty is prevalent in rural areas, specifically
Upper Egypt. About seventy-four percent of the ultra poor population lives in rural areas.
Levels of Poverty, Impoverishment, and Deprivation
A comprehensive report on Egypt was issued as the Poverty Assessment Update in 2007,
which looks at the same survey time periods as El Laithy and Kheir El Din’s research.
The Ministry of Economic Development and the World Bank developed this study,
emphasizing the necessity for some kind of agreement on poverty measurement in Egypt.
The assessment conceded that, while no single method to accurately indicate or measure
poverty exists, it was important not to confine poverty within the framework of only
measuring limited income. In order to comprehensively measure the state of deprivation,
one should use the multiple dimensions of indicators and data into account.
The Poverty Assessment Update attempts to obtain a general consensus on poverty
measurement with statistical and analytical support from Ravallion, El Laithy, Lokshin,
and Banerji’s research, as well as prior research on the subject from the World Bank
archives. It claims self-accuracy by using local prices and poverty lines adjusted to
household demographics throughout the report.
This poverty assessment uses three primary aggregate measures to account for the
‘multidimensionality’ of poverty.69 First, the head count index measures the prevalence of
poverty determined by a poverty line. It shows the percentage of poor as a proportion of
the total population. However, this indicator does not reflect the dynamics of distribution
of the poor that exist below the poverty line, but simply paints a static picture of poor vs.
non-poor. Second, the poverty gap index calculates the depth and magnitude of poverty—
the gap between low-income expenditure levels and the poverty line. Lastly, the poverty
severity index measures the degree of inequality in the distribution below the poverty
line, giving a greater weight to households at the bottom of expenditure or income
distribution.
Instead of setting a standard income or consumption line which is often used in
research on this subject, the assessment classifies poverty into three groups: extreme,
absolute, and near poverty. These three groups combined constitute the poor. Each
category has its own poverty line and is assessed by comparing household consumption
by HIECS representative survey. In 2005 dollar values, one dollar purchasing power
parity (PPP) is the equivalent to 2.57 Egyptian pounds. Dollars with the same purchasing
power in the United States, when conflated with goods and services, are more expensive
in the US, one PPP dollar per day is equivalent of much less than a current exchange rate
would imply. Those classified as extremely poor are considered as individuals who spend
less than 995 Egyptian pounds (in 2005 PPP value) per year. Absolute poor is classified as
those spending less than 1,423 pounds per year. Those who are near poor spend between
1,424 and 1,854 pounds per year. One can expand on this approach by breaking the
estimated poverty lines even further to account for age, gender, region, and household
size.
While previous poverty measurements ignored the significant differences in
consumption patterns and prices across the region, the assessment uses a cost-of-
basicneeds methodology in order to establish subsistence minimums. For example, it is
crucial for accuracy to account for different requirements of different household
members, to take economies of scale within the household into account, as well as to
consider that non-food items can be shared among household members. The methodology
used in this report can account for the problems with previous poverty research in Egypt.
Accordingly, Egypt follows an absolute poverty line with a focus on those who are
deprived of the ‘most basic needs,’ rather than those who potentially face deprivation
relative to their fellow citizens. Using the PPP exchange rate as a set value for the 95/96,
99/00, and 04/05 surveys, two internationally standard poverty lines are used in this
report. This allows for a broader understanding of the circumstances of minimum living
standards, defined as 1$ a day, and those who are more prone or vulnerable to poverty
denoted by 2$ a day.
In combining this poverty line with total poverty line, the food poverty line is
supplemented by an allowance for expenditure for essential non-food goods. The price of
non-food expenses is estimated by identifying the share of non-food expenditure for
households whose total expenditure was equivalent to the food poverty line. Poverty rates
are based on comparisons between actual expenditure and the cost of a consumption
basket securing 2,470 calories per day per person, along with some additional basic
services.
This report thus concludes that approximately forty percent of the population in
Egypt is clustered between one and two dollars per capita a day. It also notes that in
examining the poverty trends from 1996-2005, the poverty rate was 19.4% in 1996,
16.7% in 2000, and 19.6% in 2005. This confirms El Laithy and Kheir El Din’s estimates.
The assessment further reports that those who faced extreme poverty were at 2% in 1996,
2.9% in 2000, and 3.8% in 2005. Those that were near poverty were at 32% in 1996,
25.9% in 2000, and 29.9 percent in 2005. The poverty gap index was 3.4% in 1996, 3.0%
in 2000, and 3.6% in 2005. The poverty severity index was at 2% in 1996, 2.9% in 2000,
and 3.8% in 2005. These conclusions represent the overall poverty profile of Egypt during
this time period.
Furthermore, one can expand on the differences between deprivation and severe
deprivation. For example, according to Gordon’s deprivation scale, if an individual has a
body mass index under 16, they are severely underweight and therefore represent the
element of severe deprivation. The scale moves up to a body mass index of 18.5, anything
below this threshold would represent deprivation. Using the BMI to calculate health and
nourishment is useful. While it does not take into account individual preference, nutrition,
or food baskets, it does provide a general idea of a person’s health by using their height
and weight and oftentimes, age and gender. Clearly, there are variations for standard or
optimal BMI and this measure has many limitations. However, because the cut off for
severe deprivation is staggered to a very low BMI number, it can be very practical when
used with other deprivation indicators.
His scale also elaborates on specific criteria to determine the standards of his
scale. Each one differentiates between deprivation and severe deprivation. Although his
criteria are useful for understanding general thresholds for deprivation and severe
deprivation, they ignore a crucial factor, the perception of poverty.
In perceiving poverty on any scale, the role of inequality cannot be ignored.
Inequality can intensify poverty, not only in terms of statistical facts, but in opinions of
circumstance as well. If an individual is living in deprivation, that deprivation can seem
exaggerated if his neighbor is living in luxury. Therefore, the perception of poverty
cannot be ignored when looking at levels of deprivation.
Within any given community, certain individuals may not perceive themselves as
poor at all, even though they might not have access to health or educational facilities or
they live in mud floor houses without modern sanitation. By most standards, this would
constitute an extreme level of poverty. But if most of the community lived within these
same sets of living or social circumstances, their own interpretation of poverty would be
limited to their direct experience. For example, if everyone in an indigenous tribe in
South America lived in mud huts and used the local river for sustenance, inequality does
not seem readily apparent. There is not a large discrepancy between the different groups
in the tribe (although power and politics within any society are bound to play a role).
However if a particular few of that group have access to other facilities or modern
technology, or are even aware that it exists regardless of their lifestyle, they may perceive
their situation as more unequal and more dire than otherwise
For example, indigenous populations in South America may not view themselves
as living in severe poverty although they could potentially fall under that category
according to Gordon’s eight criteria. Some of these groups use rivers and ponds instead of
modern plumbing. They have no access to healthcare; they live in houses with mud floors
or no floors at all; they share space with four or more people per room; they have no
access to newspapers, radios, computers, or other modern information sources. While
many of these things may be true for large groups of marginalized peoples in societies,
they do not automatically infer severe poverty. These criteria are largely based on a
modern Western version of deprivation and minimum living standards, enhanced by
inequalities in a society. You cannot be a “have not” if you are not exposed to certain
assets that would allow you to “have” something in the first place.
Vulnerability
There are certain freedoms, choices, and rights that limit a person in poverty.
Deprivation reflects vulnerability; the poor are often at risk in terms of health, education,
social stability, or ill treatment and abuse by society or the state. The vulnerability
dimension is usually due to events in which an individual has no control. For example,
violence, disease, economic shocks and natural disasters all reinforce a person’s attitude
towards his own perception of poverty. Vulnerability, in this aspect, “exacerbates material
poverty and weakens their bargaining position” of groups at risk. The poor often have no
voice, control, or representation in their personal development. Vulnerability represents
the risk a household has of falling into poverty. These groups often fall into poverty
clusters and are highly sensitive to shocks such as emergency medical expenses, lost jobs,
natural disasters, bad business profits, etc. Vulnerability can be mitigated through giving
at-risk groups of society empowerment and their opportunities and security. Vulnerability
is crucial in the experience and processes of poverty.
Interpretation and Perception of Poverty
Interpretations of poverty and poorness are subjective. What constitutes poverty to
one individual may be perceived differently to another. Different poverty thresholds can
be determined by subjective poverty lines, which depend on the personal judgment of an
individual or household’s standard of living. The benefit of this threshold is that it
identifies poverty measurement as an intrinsically deduced judgment by a person of what
is acceptable as minimum living standard. Subjective poverty is more dependent on
personal perception and considerations by the population that is being measured. For
example, if the inequality rate is high in a country, the bottom quadrant of the population
may not be living in actual poverty. This group may perceive their poverty based on
comparisons to those with better living standards. Subjective poverty is an important
measure, but it can be problematic as it is inherently subject to individual preferences of
basic needs. These preferences are dynamic and differ based on relative criteria, such as
individual taste, location, gender, occupation, and price variations.
The perception of poverty plays an important role in understanding
impoverishment. A person’s individual perception of his own poverty greatly influences
his level of deprivation. A government’s perception of poverty would obviously play an
enormous role in determining social and welfare policy.
Subjective factors such as interpretation, poverty measurement, or methods for
quantifying growth demonstrate how poverty measures are conditional on the perception
of one’s understanding of poverty. This can be demonstrated by the nature and scale of
poverty studies in Egypt. Poverty analysis in Egypt differs widely in magnitude,
distribution, and incidence, illustrated by the various conflicting representations of
poverty in Egypt among current scholarship and research. Even more interesting is that
the majority of work on poverty in Egypt stems from the exact same survey data produced
by the Central Agency for Public Mobilization and Statistics and the Egyptian
government. Yet, although the data from CAPMAS is the only officially available data on
poverty figures in Egypt, different institutions, economists, and social researchers have
put a subjective spin on the overall results, painting a confusing and rather incoherent
picture of poverty in Egypt. This conflict arises from the different methodologies and
poverty lines used to indicate social welfare. Frequently, it is merely a minor change in
percentages of poverty measurement indexes. However, in the broader situation, millions
of people might be ignored or incorrectly aggregated into an author’s subjective category
of poverty.
Poverty in the Egyptian Context:
Poverty Research and Methodologies in Egypt
When considering the effects of political policy, economic reform, and social funding
directed toward welfare and well being in developing countries, policy formation should
focus on the importance of objective poverty research and accountability.
Poverty analysis and scholarship in Egypt are gathered from many different
authorities; from institutions such as the World Bank or IFPRI, private researchers,
Egyptian economists or other political economy scientists researching poverty statistics.
Most of these reports use primary data from Household Income Expenditure and
Consumption Surveys (HIECS) conducted by CAPMAS, the official statistical agency in
Egypt. These surveys began in 1957 by the Egyptian government but were conducted on
an irregular basis in 1964/65, 1974/75, and 1981/982. It was not until 1990 that
CAPMAS began issuing the surveys every 5 years.
While these surveys are useful in understanding broad trends in poverty in Egypt,
they have significant limitations. First, nutritional and food related data is not readily
available. Second, the results and methods of calculating individual diets, which vary
between differing ages, sexes, occupation, and geography, are ambiguous, leading many
poverty researchers to use their own interpretive methodologies to calculate the
magnitude and dimensions of poverty. Third, the Institute of National Planning and
CAPMAS did not release their surveys in an individual household form nor did they
specify these differences and relative measurements. Furthermore, it is also unclear how
CAPMAS accounted for regional variations with food and non-food pricing, which would
clearly impact the construction of expenditure-based poverty lines. Finally, all of the
poverty lines utilized are based on consumer expenditure data, which does not account for
saving or borrowing from other sources.
As previously mentioned, the most consistent source of poverty analysis and
measurement comes from the Household, Income, Expenditure, and Consumption
Surveys for the years 1990/91, 1995/96, 1999/00, and 2004/05. These surveys were
administrated through CAPMAS using household specific poverty lines, including both a
standardized food and a nonfood poverty line. Economists Hanaa Kheir el Din and Heba
el-Laithy analyzed these surveys in conjunction with poverty-related data from the
Ministry of Economic Development, CAPMAS, and the World Bank databases. The data
is useful in observing patterns of growth and poverty in Egypt during this period.
1990 marks the initial period of consistent CAMPAS studies which were then
surveyed and issued every five years. According to the Poverty Assessment Update, these
surveys consist of large samples drawn from the whole country and contain data on
income/consumption and expenditures on over 600 items of goods and services. They
provide “a good source of information on the distribution of welfare within Egyptian
society.” Second, the continuity of data is important both for accuracy and consistency,
although during this period, there was limited methodical or empirical data available from
official sources. No nationally representative unit level data was available for public
usage from either government or private sources. Most of the scholars who analyze and
report poverty statistics on Egypt note this lack of formal or reliable data for poverty and
inequality.
According to El Laithy and Kheir El Din’s results, poverty—including measures
such as depth, severity, incidence, etc.—declined during the second half of the nineties.
This was an indirect result of the drastic GDP growth in 1994/95 compared to earlier
years, particularly with regard to extremely high incidences of poverty in Egypt
throughout the 1980’s. According to the author’s estimates and information from the
HIECS, the results were interpreted using poverty indicators that represented a person’s
ability to obtain basic food and nonfood needs. This was based on individual per capita
poverty lines and then measured and calculated using household poverty lines. The
incidence, depth, and severity of poverty were calculated by using aggregate poverty
measures from 1990 to 2005. According to this data, poverty fell from 24.18% of the
population in 1990/91 to 19.41% in 1995/96. It decreased further from 19.41% to 16.74%
in 1999/00. The poverty rate then increased from 16.74 to 19.56 percent in 2004/05. The
data also showed that both the depth and severity of poverty followed similar patterns.
Both measures decreased dramatically from 1990/91 to 1995/96, dropped further in
1999/00, and then increased in 2004/05.
In terms of household income inequality the gini coefficient (the measure of
inequality of wealth) decreased from 1990/91 to 1995/96 which indicated a better
distribution of wealth. From 1995/96 to 1999/00, the gini coefficient increased slightly
which demonstrated an increase of wealth inequality. However, from 1999/00 to 2004/05,
inequality decreased to its lowest relative level in the 15-year period. Inequality was
lowest in 2004/05, suggesting a more equitable distribution of wealth and a smaller
poverty gap. If this information is marginally correct, one could arguably conclude that
income distribution has improved from 1990-2005. This data, compared with the survey
data, provides a general and approximate conceptualization of poverty in Egypt.
Poverty in Egypt
When discussing ultra poverty, extreme impoverishment, and absolute poor groups in a
society, one is talking about the highly marginalized, vulnerable, and high-risk social
groups. In Datt, Joliffe, and Sharma’s profile of poverty in Egypt, they note some of the
common characteristics of those living in severe impoverishment. They use per capita
consumption as a measure of individual welfare to reflect individual preferences
conditional on prices and incomes. They also incorporate regional differences, size and
age composition of households and nonfood consumption preferences for relatively poor
households to portray a comprehensive profile of the levels of poverty in Egypt.
Accordingly, in 1997, about 15.7 million or 26.5 percent of the population in Egypt was
classified as poor. Within this group of poor, 5.1 million were determined to be living in
absolute poverty or ultra poor. While the poverty gap index and headcount index did not
show the severity of poverty, the poverty-gap and squared-poverty-gap indexes are the
worst in the rural regions. However the Gini coefficient is worse in the urban areas.
Datt and Joliffe’s research in Egypt correlate with some demographic
generalizations in poverty indicators and comparisons. For example, some of the poorest
households have larger households and higher dependency ratios. These households have
members who are between the ages of 0-15 or over 60 and would not traditionally
contribute to the sustainability and management of a household. Instead they depend on
other members of the family for financial, economic, and social support. Extreme poor
household compositions typically are larger than poor households with an average 8
family members while poor households are around 5.4 members. Female-headed
households are also vulnerable and are at risk to live in absolute impoverishment. The
ultra poor have a much higher percentage of family members who do not complete
primary school. Most work as casual wage laborers; employment that is rarely consistent
and highly vulnerable to shocks. Absolute poverty is prevalent in rural areas, specifically
Upper Egypt. About seventy-four percent of the ultra poor population lives in rural areas.
Levels of Poverty, Impoverishment, and Deprivation
A comprehensive report on Egypt was issued as the Poverty Assessment Update in 2007,
which looks at the same survey time periods as El Laithy and Kheir El Din’s research.
The Ministry of Economic Development and the World Bank developed this study,
emphasizing the necessity for some kind of agreement on poverty measurement in Egypt.
The assessment conceded that, while no single method to accurately indicate or measure
poverty exists, it was important not to confine poverty within the framework of only
measuring limited income. In order to comprehensively measure the state of deprivation,
one should use the multiple dimensions of indicators and data into account.
The Poverty Assessment Update attempts to obtain a general consensus on poverty
measurement with statistical and analytical support from Ravallion, El Laithy, Lokshin,
and Banerji’s research, as well as prior research on the subject from the World Bank
archives. It claims self-accuracy by using local prices and poverty lines adjusted to
household demographics throughout the report.
This poverty assessment uses three primary aggregate measures to account for the
‘multidimensionality’ of poverty.69 First, the head count index measures the prevalence of
poverty determined by a poverty line. It shows the percentage of poor as a proportion of
the total population. However, this indicator does not reflect the dynamics of distribution
of the poor that exist below the poverty line, but simply paints a static picture of poor vs.
non-poor. Second, the poverty gap index calculates the depth and magnitude of poverty—
the gap between low-income expenditure levels and the poverty line. Lastly, the poverty
severity index measures the degree of inequality in the distribution below the poverty
line, giving a greater weight to households at the bottom of expenditure or income
distribution.
Instead of setting a standard income or consumption line which is often used in
research on this subject, the assessment classifies poverty into three groups: extreme,
absolute, and near poverty. These three groups combined constitute the poor. Each
category has its own poverty line and is assessed by comparing household consumption
by HIECS representative survey. In 2005 dollar values, one dollar purchasing power
parity (PPP) is the equivalent to 2.57 Egyptian pounds. Dollars with the same purchasing
power in the United States, when conflated with goods and services, are more expensive
in the US, one PPP dollar per day is equivalent of much less than a current exchange rate
would imply. Those classified as extremely poor are considered as individuals who spend
less than 995 Egyptian pounds (in 2005 PPP value) per year. Absolute poor is classified as
those spending less than 1,423 pounds per year. Those who are near poor spend between
1,424 and 1,854 pounds per year. One can expand on this approach by breaking the
estimated poverty lines even further to account for age, gender, region, and household
size.
While previous poverty measurements ignored the significant differences in
consumption patterns and prices across the region, the assessment uses a cost-of-
basicneeds methodology in order to establish subsistence minimums. For example, it is
crucial for accuracy to account for different requirements of different household
members, to take economies of scale within the household into account, as well as to
consider that non-food items can be shared among household members. The methodology
used in this report can account for the problems with previous poverty research in Egypt.
Accordingly, Egypt follows an absolute poverty line with a focus on those who are
deprived of the ‘most basic needs,’ rather than those who potentially face deprivation
relative to their fellow citizens. Using the PPP exchange rate as a set value for the 95/96,
99/00, and 04/05 surveys, two internationally standard poverty lines are used in this
report. This allows for a broader understanding of the circumstances of minimum living
standards, defined as 1$ a day, and those who are more prone or vulnerable to poverty
denoted by 2$ a day.
In combining this poverty line with total poverty line, the food poverty line is
supplemented by an allowance for expenditure for essential non-food goods. The price of
non-food expenses is estimated by identifying the share of non-food expenditure for
households whose total expenditure was equivalent to the food poverty line. Poverty rates
are based on comparisons between actual expenditure and the cost of a consumption
basket securing 2,470 calories per day per person, along with some additional basic
services.
This report thus concludes that approximately forty percent of the population in
Egypt is clustered between one and two dollars per capita a day. It also notes that in
examining the poverty trends from 1996-2005, the poverty rate was 19.4% in 1996,
16.7% in 2000, and 19.6% in 2005. This confirms El Laithy and Kheir El Din’s estimates.
The assessment further reports that those who faced extreme poverty were at 2% in 1996,
2.9% in 2000, and 3.8% in 2005. Those that were near poverty were at 32% in 1996,
25.9% in 2000, and 29.9 percent in 2005. The poverty gap index was 3.4% in 1996, 3.0%
in 2000, and 3.6% in 2005. The poverty severity index was at 2% in 1996, 2.9% in 2000,
and 3.8% in 2005. These conclusions represent the overall poverty profile of Egypt during
this time period.
Furthermore, one can expand on the differences between deprivation and severe
deprivation. For example, according to Gordon’s deprivation scale, if an individual has a
body mass index under 16, they are severely underweight and therefore represent the
element of severe deprivation. The scale moves up to a body mass index of 18.5, anything
below this threshold would represent deprivation. Using the BMI to calculate health and
nourishment is useful. While it does not take into account individual preference, nutrition,
or food baskets, it does provide a general idea of a person’s health by using their height
and weight and oftentimes, age and gender. Clearly, there are variations for standard or
optimal BMI and this measure has many limitations. However, because the cut off for
severe deprivation is staggered to a very low BMI number, it can be very practical when
used with other deprivation indicators.
His scale also elaborates on specific criteria to determine the standards of his
scale. Each one differentiates between deprivation and severe deprivation. Although his
criteria are useful for understanding general thresholds for deprivation and severe
deprivation, they ignore a crucial factor, the perception of poverty.
In perceiving poverty on any scale, the role of inequality cannot be ignored.
Inequality can intensify poverty, not only in terms of statistical facts, but in opinions of
circumstance as well. If an individual is living in deprivation, that deprivation can seem
exaggerated if his neighbor is living in luxury. Therefore, the perception of poverty
cannot be ignored when looking at levels of deprivation.
Within any given community, certain individuals may not perceive themselves as
poor at all, even though they might not have access to health or educational facilities or
they live in mud floor houses without modern sanitation. By most standards, this would
constitute an extreme level of poverty. But if most of the community lived within these
same sets of living or social circumstances, their own interpretation of poverty would be
limited to their direct experience. For example, if everyone in an indigenous tribe in
South America lived in mud huts and used the local river for sustenance, inequality does
not seem readily apparent. There is not a large discrepancy between the different groups
in the tribe (although power and politics within any society are bound to play a role).
However if a particular few of that group have access to other facilities or modern
technology, or are even aware that it exists regardless of their lifestyle, they may perceive
their situation as more unequal and more dire than otherwise
For example, indigenous populations in South America may not view themselves
as living in severe poverty although they could potentially fall under that category
according to Gordon’s eight criteria. Some of these groups use rivers and ponds instead of
modern plumbing. They have no access to healthcare; they live in houses with mud floors
or no floors at all; they share space with four or more people per room; they have no
access to newspapers, radios, computers, or other modern information sources. While
many of these things may be true for large groups of marginalized peoples in societies,
they do not automatically infer severe poverty. These criteria are largely based on a
modern Western version of deprivation and minimum living standards, enhanced by
inequalities in a society. You cannot be a “have not” if you are not exposed to certain
assets that would allow you to “have” something in the first place.
Vulnerability
There are certain freedoms, choices, and rights that limit a person in poverty.
Deprivation reflects vulnerability; the poor are often at risk in terms of health, education,
social stability, or ill treatment and abuse by society or the state. The vulnerability
dimension is usually due to events in which an individual has no control. For example,
violence, disease, economic shocks and natural disasters all reinforce a person’s attitude
towards his own perception of poverty. Vulnerability, in this aspect, “exacerbates material
poverty and weakens their bargaining position” of groups at risk. The poor often have no
voice, control, or representation in their personal development. Vulnerability represents
the risk a household has of falling into poverty. These groups often fall into poverty
clusters and are highly sensitive to shocks such as emergency medical expenses, lost jobs,
natural disasters, bad business profits, etc. Vulnerability can be mitigated through giving
at-risk groups of society empowerment and their opportunities and security. Vulnerability
is crucial in the experience and processes of poverty.
Interpretation and Perception of Poverty
Interpretations of poverty and poorness are subjective. What constitutes poverty to
one individual may be perceived differently to another. Different poverty thresholds can
be determined by subjective poverty lines, which depend on the personal judgment of an
individual or household’s standard of living. The benefit of this threshold is that it
identifies poverty measurement as an intrinsically deduced judgment by a person of what
is acceptable as minimum living standard. Subjective poverty is more dependent on
personal perception and considerations by the population that is being measured. For
example, if the inequality rate is high in a country, the bottom quadrant of the population
may not be living in actual poverty. This group may perceive their poverty based on
comparisons to those with better living standards. Subjective poverty is an important
measure, but it can be problematic as it is inherently subject to individual preferences of
basic needs. These preferences are dynamic and differ based on relative criteria, such as
individual taste, location, gender, occupation, and price variations.
The perception of poverty plays an important role in understanding
impoverishment. A person’s individual perception of his own poverty greatly influences
his level of deprivation. A government’s perception of poverty would obviously play an
enormous role in determining social and welfare policy.
Subjective factors such as interpretation, poverty measurement, or methods for
quantifying growth demonstrate how poverty measures are conditional on the perception
of one’s understanding of poverty. This can be demonstrated by the nature and scale of
poverty studies in Egypt. Poverty analysis in Egypt differs widely in magnitude,
distribution, and incidence, illustrated by the various conflicting representations of
poverty in Egypt among current scholarship and research. Even more interesting is that
the majority of work on poverty in Egypt stems from the exact same survey data produced
by the Central Agency for Public Mobilization and Statistics and the Egyptian
government. Yet, although the data from CAPMAS is the only officially available data on
poverty figures in Egypt, different institutions, economists, and social researchers have
put a subjective spin on the overall results, painting a confusing and rather incoherent
picture of poverty in Egypt. This conflict arises from the different methodologies and
poverty lines used to indicate social welfare. Frequently, it is merely a minor change in
percentages of poverty measurement indexes. However, in the broader situation, millions
of people might be ignored or incorrectly aggregated into an author’s subjective category
of poverty.
Poverty in the Egyptian Context:
Poverty Research and Methodologies in Egypt
When considering the effects of political policy, economic reform, and social funding
directed toward welfare and well being in developing countries, policy formation should
focus on the importance of objective poverty research and accountability.
Poverty analysis and scholarship in Egypt are gathered from many different
authorities; from institutions such as the World Bank or IFPRI, private researchers,
Egyptian economists or other political economy scientists researching poverty statistics.
Most of these reports use primary data from Household Income Expenditure and
Consumption Surveys (HIECS) conducted by CAPMAS, the official statistical agency in
Egypt. These surveys began in 1957 by the Egyptian government but were conducted on
an irregular basis in 1964/65, 1974/75, and 1981/982. It was not until 1990 that
CAPMAS began issuing the surveys every 5 years.
While these surveys are useful in understanding broad trends in poverty in Egypt,
they have significant limitations. First, nutritional and food related data is not readily
available. Second, the results and methods of calculating individual diets, which vary
between differing ages, sexes, occupation, and geography, are ambiguous, leading many
poverty researchers to use their own interpretive methodologies to calculate the
magnitude and dimensions of poverty. Third, the Institute of National Planning and
CAPMAS did not release their surveys in an individual household form nor did they
specify these differences and relative measurements. Furthermore, it is also unclear how
CAPMAS accounted for regional variations with food and non-food pricing, which would
clearly impact the construction of expenditure-based poverty lines. Finally, all of the
poverty lines utilized are based on consumer expenditure data, which does not account for
saving or borrowing from other sources.
As previously mentioned, the most consistent source of poverty analysis and
measurement comes from the Household, Income, Expenditure, and Consumption
Surveys for the years 1990/91, 1995/96, 1999/00, and 2004/05. These surveys were
administrated through CAPMAS using household specific poverty lines, including both a
standardized food and a nonfood poverty line. Economists Hanaa Kheir el Din and Heba
el-Laithy analyzed these surveys in conjunction with poverty-related data from the
Ministry of Economic Development, CAPMAS, and the World Bank databases. The data
is useful in observing patterns of growth and poverty in Egypt during this period.
1990 marks the initial period of consistent CAMPAS studies which were then
surveyed and issued every five years. According to the Poverty Assessment Update, these
surveys consist of large samples drawn from the whole country and contain data on
income/consumption and expenditures on over 600 items of goods and services. They
provide “a good source of information on the distribution of welfare within Egyptian
society.” Second, the continuity of data is important both for accuracy and consistency,
although during this period, there was limited methodical or empirical data available from
official sources. No nationally representative unit level data was available for public
usage from either government or private sources. Most of the scholars who analyze and
report poverty statistics on Egypt note this lack of formal or reliable data for poverty and
inequality.
According to El Laithy and Kheir El Din’s results, poverty—including measures
such as depth, severity, incidence, etc.—declined during the second half of the nineties.
This was an indirect result of the drastic GDP growth in 1994/95 compared to earlier
years, particularly with regard to extremely high incidences of poverty in Egypt
throughout the 1980’s. According to the author’s estimates and information from the
HIECS, the results were interpreted using poverty indicators that represented a person’s
ability to obtain basic food and nonfood needs. This was based on individual per capita
poverty lines and then measured and calculated using household poverty lines. The
incidence, depth, and severity of poverty were calculated by using aggregate poverty
measures from 1990 to 2005. According to this data, poverty fell from 24.18% of the
population in 1990/91 to 19.41% in 1995/96. It decreased further from 19.41% to 16.74%
in 1999/00. The poverty rate then increased from 16.74 to 19.56 percent in 2004/05. The
data also showed that both the depth and severity of poverty followed similar patterns.
Both measures decreased dramatically from 1990/91 to 1995/96, dropped further in
1999/00, and then increased in 2004/05.
In terms of household income inequality the gini coefficient (the measure of
inequality of wealth) decreased from 1990/91 to 1995/96 which indicated a better
distribution of wealth. From 1995/96 to 1999/00, the gini coefficient increased slightly
which demonstrated an increase of wealth inequality. However, from 1999/00 to 2004/05,
inequality decreased to its lowest relative level in the 15-year period. Inequality was
lowest in 2004/05, suggesting a more equitable distribution of wealth and a smaller
poverty gap. If this information is marginally correct, one could arguably conclude that
income distribution has improved from 1990-2005. This data, compared with the survey
data, provides a general and approximate conceptualization of poverty in Egypt.
Poverty in Egypt
When discussing ultra poverty, extreme impoverishment, and absolute poor groups in a
society, one is talking about the highly marginalized, vulnerable, and high-risk social
groups. In Datt, Joliffe, and Sharma’s profile of poverty in Egypt, they note some of the
common characteristics of those living in severe impoverishment. They use per capita
consumption as a measure of individual welfare to reflect individual preferences
conditional on prices and incomes. They also incorporate regional differences, size and
age composition of households and nonfood consumption preferences for relatively poor
households to portray a comprehensive profile of the levels of poverty in Egypt.
Accordingly, in 1997, about 15.7 million or 26.5 percent of the population in Egypt was
classified as poor. Within this group of poor, 5.1 million were determined to be living in
absolute poverty or ultra poor. While the poverty gap index and headcount index did not
show the severity of poverty, the poverty-gap and squared-poverty-gap indexes are the
worst in the rural regions. However the Gini coefficient is worse in the urban areas.
Datt and Joliffe’s research in Egypt correlate with some demographic
generalizations in poverty indicators and comparisons. For example, some of the poorest
households have larger households and higher dependency ratios. These households have
members who are between the ages of 0-15 or over 60 and would not traditionally
contribute to the sustainability and management of a household. Instead they depend on
other members of the family for financial, economic, and social support. Extreme poor
household compositions typically are larger than poor households with an average 8
family members while poor households are around 5.4 members. Female-headed
households are also vulnerable and are at risk to live in absolute impoverishment. The
ultra poor have a much higher percentage of family members who do not complete
primary school. Most work as casual wage laborers; employment that is rarely consistent
and highly vulnerable to shocks. Absolute poverty is prevalent in rural areas, specifically
Upper Egypt. About seventy-four percent of the ultra poor population lives in rural areas.
Levels of Poverty, Impoverishment, and Deprivation
A comprehensive report on Egypt was issued as the Poverty Assessment Update in 2007,
which looks at the same survey time periods as El Laithy and Kheir El Din’s research.
The Ministry of Economic Development and the World Bank developed this study,
emphasizing the necessity for some kind of agreement on poverty measurement in Egypt.
The assessment conceded that, while no single method to accurately indicate or measure
poverty exists, it was important not to confine poverty within the framework of only
measuring limited income. In order to comprehensively measure the state of deprivation,
one should use the multiple dimensions of indicators and data into account.
The Poverty Assessment Update attempts to obtain a general consensus on poverty
measurement with statistical and analytical support from Ravallion, El Laithy, Lokshin,
and Banerji’s research, as well as prior research on the subject from the World Bank
archives. It claims self-accuracy by using local prices and poverty lines adjusted to
household demographics throughout the report.
This poverty assessment uses three primary aggregate measures to account for the
‘multidimensionality’ of poverty.69 First, the head count index measures the prevalence of
poverty determined by a poverty line. It shows the percentage of poor as a proportion of
the total population. However, this indicator does not reflect the dynamics of distribution
of the poor that exist below the poverty line, but simply paints a static picture of poor vs.
non-poor. Second, the poverty gap index calculates the depth and magnitude of poverty—
the gap between low-income expenditure levels and the poverty line. Lastly, the poverty
severity index measures the degree of inequality in the distribution below the poverty
line, giving a greater weight to households at the bottom of expenditure or income
distribution.
Instead of setting a standard income or consumption line which is often used in
research on this subject, the assessment classifies poverty into three groups: extreme,
absolute, and near poverty. These three groups combined constitute the poor. Each
category has its own poverty line and is assessed by comparing household consumption
by HIECS representative survey. In 2005 dollar values, one dollar purchasing power
parity (PPP) is the equivalent to 2.57 Egyptian pounds. Dollars with the same purchasing
power in the United States, when conflated with goods and services, are more expensive
in the US, one PPP dollar per day is equivalent of much less than a current exchange rate
would imply. Those classified as extremely poor are considered as individuals who spend
less than 995 Egyptian pounds (in 2005 PPP value) per year. Absolute poor is classified as
those spending less than 1,423 pounds per year. Those who are near poor spend between
1,424 and 1,854 pounds per year. One can expand on this approach by breaking the
estimated poverty lines even further to account for age, gender, region, and household
size.
While previous poverty measurements ignored the significant differences in
consumption patterns and prices across the region, the assessment uses a cost-of-
basicneeds methodology in order to establish subsistence minimums. For example, it is
crucial for accuracy to account for different requirements of different household
members, to take economies of scale within the household into account, as well as to
consider that non-food items can be shared among household members. The methodology
used in this report can account for the problems with previous poverty research in Egypt.
Accordingly, Egypt follows an absolute poverty line with a focus on those who are
deprived of the ‘most basic needs,’ rather than those who potentially face deprivation
relative to their fellow citizens. Using the PPP exchange rate as a set value for the 95/96,
99/00, and 04/05 surveys, two internationally standard poverty lines are used in this
report. This allows for a broader understanding of the circumstances of minimum living
standards, defined as 1$ a day, and those who are more prone or vulnerable to poverty
denoted by 2$ a day.
In combining this poverty line with total poverty line, the food poverty line is
supplemented by an allowance for expenditure for essential non-food goods. The price of
non-food expenses is estimated by identifying the share of non-food expenditure for
households whose total expenditure was equivalent to the food poverty line. Poverty rates
are based on comparisons between actual expenditure and the cost of a consumption
basket securing 2,470 calories per day per person, along with some additional basic
services.
This report thus concludes that approximately forty percent of the population in
Egypt is clustered between one and two dollars per capita a day. It also notes that in
examining the poverty trends from 1996-2005, the poverty rate was 19.4% in 1996,
16.7% in 2000, and 19.6% in 2005. This confirms El Laithy and Kheir El Din’s estimates.
The assessment further reports that those who faced extreme poverty were at 2% in 1996,
2.9% in 2000, and 3.8% in 2005. Those that were near poverty were at 32% in 1996,
25.9% in 2000, and 29.9 percent in 2005. The poverty gap index was 3.4% in 1996, 3.0%
in 2000, and 3.6% in 2005. The poverty severity index was at 2% in 1996, 2.9% in 2000,
and 3.8% in 2005. These conclusions represent the overall poverty profile of Egypt during
this time period.
Furthermore, one can expand on the differences between deprivation and severe
deprivation. For example, according to Gordon’s deprivation scale, if an individual has a
body mass index under 16, they are severely underweight and therefore represent the
element of severe deprivation. The scale moves up to a body mass index of 18.5, anything
below this threshold would represent deprivation. Using the BMI to calculate health and
nourishment is useful. While it does not take into account individual preference, nutrition,
or food baskets, it does provide a general idea of a person’s health by using their height
and weight and oftentimes, age and gender. Clearly, there are variations for standard or
optimal BMI and this measure has many limitations. However, because the cut off for
severe deprivation is staggered to a very low BMI number, it can be very practical when
used with other deprivation indicators.
His scale also elaborates on specific criteria to determine the standards of his
scale. Each one differentiates between deprivation and severe deprivation. Although his
criteria are useful for understanding general thresholds for deprivation and severe
deprivation, they ignore a crucial factor, the perception of poverty.
In perceiving poverty on any scale, the role of inequality cannot be ignored.
Inequality can intensify poverty, not only in terms of statistical facts, but in opinions of
circumstance as well. If an individual is living in deprivation, that deprivation can seem
exaggerated if his neighbor is living in luxury. Therefore, the perception of poverty
cannot be ignored when looking at levels of deprivation.
Within any given community, certain individuals may not perceive themselves as
poor at all, even though they might not have access to health or educational facilities or
they live in mud floor houses without modern sanitation. By most standards, this would
constitute an extreme level of poverty. But if most of the community lived within these
same sets of living or social circumstances, their own interpretation of poverty would be
limited to their direct experience. For example, if everyone in an indigenous tribe in
South America lived in mud huts and used the local river for sustenance, inequality does
not seem readily apparent. There is not a large discrepancy between the different groups
in the tribe (although power and politics within any society are bound to play a role).
However if a particular few of that group have access to other facilities or modern
technology, or are even aware that it exists regardless of their lifestyle, they may perceive
their situation as more unequal and more dire than otherwise
For example, indigenous populations in South America may not view themselves
as living in severe poverty although they could potentially fall under that category
according to Gordon’s eight criteria. Some of these groups use rivers and ponds instead of
modern plumbing. They have no access to healthcare; they live in houses with mud floors
or no floors at all; they share space with four or more people per room; they have no
access to newspapers, radios, computers, or other modern information sources. While
many of these things may be true for large groups of marginalized peoples in societies,
they do not automatically infer severe poverty. These criteria are largely based on a
modern Western version of deprivation and minimum living standards, enhanced by
inequalities in a society. You cannot be a “have not” if you are not exposed to certain
assets that would allow you to “have” something in the first place.
Vulnerability
There are certain freedoms, choices, and rights that limit a person in poverty.
Deprivation reflects vulnerability; the poor are often at risk in terms of health, education,
social stability, or ill treatment and abuse by society or the state. The vulnerability
dimension is usually due to events in which an individual has no control. For example,
violence, disease, economic shocks and natural disasters all reinforce a person’s attitude
towards his own perception of poverty. Vulnerability, in this aspect, “exacerbates material
poverty and weakens their bargaining position” of groups at risk. The poor often have no
voice, control, or representation in their personal development. Vulnerability represents
the risk a household has of falling into poverty. These groups often fall into poverty
clusters and are highly sensitive to shocks such as emergency medical expenses, lost jobs,
natural disasters, bad business profits, etc. Vulnerability can be mitigated through giving
at-risk groups of society empowerment and their opportunities and security. Vulnerability
is crucial in the experience and processes of poverty.
Interpretation and Perception of Poverty
Interpretations of poverty and poorness are subjective. What constitutes poverty to
one individual may be perceived differently to another. Different poverty thresholds can
be determined by subjective poverty lines, which depend on the personal judgment of an
individual or household’s standard of living. The benefit of this threshold is that it
identifies poverty measurement as an intrinsically deduced judgment by a person of what
is acceptable as minimum living standard. Subjective poverty is more dependent on
personal perception and considerations by the population that is being measured. For
example, if the inequality rate is high in a country, the bottom quadrant of the population
may not be living in actual poverty. This group may perceive their poverty based on
comparisons to those with better living standards. Subjective poverty is an important
measure, but it can be problematic as it is inherently subject to individual preferences of
basic needs. These preferences are dynamic and differ based on relative criteria, such as
individual taste, location, gender, occupation, and price variations.
The perception of poverty plays an important role in understanding
impoverishment. A person’s individual perception of his own poverty greatly influences
his level of deprivation. A government’s perception of poverty would obviously play an
enormous role in determining social and welfare policy.
Subjective factors such as interpretation, poverty measurement, or methods for
quantifying growth demonstrate how poverty measures are conditional on the perception
of one’s understanding of poverty. This can be demonstrated by the nature and scale of
poverty studies in Egypt. Poverty analysis in Egypt differs widely in magnitude,
distribution, and incidence, illustrated by the various conflicting representations of
poverty in Egypt among current scholarship and research. Even more interesting is that
the majority of work on poverty in Egypt stems from the exact same survey data produced
by the Central Agency for Public Mobilization and Statistics and the Egyptian
government. Yet, although the data from CAPMAS is the only officially available data on
poverty figures in Egypt, different institutions, economists, and social researchers have
put a subjective spin on the overall results, painting a confusing and rather incoherent
picture of poverty in Egypt. This conflict arises from the different methodologies and
poverty lines used to indicate social welfare. Frequently, it is merely a minor change in
percentages of poverty measurement indexes. However, in the broader situation, millions
of people might be ignored or incorrectly aggregated into an author’s subjective category
of poverty.
Poverty in the Egyptian Context:
Poverty Research and Methodologies in Egypt
When considering the effects of political policy, economic reform, and social funding
directed toward welfare and well being in developing countries, policy formation should
focus on the importance of objective poverty research and accountability.
Poverty analysis and scholarship in Egypt are gathered from many different
authorities; from institutions such as the World Bank or IFPRI, private researchers,
Egyptian economists or other political economy scientists researching poverty statistics.
Most of these reports use primary data from Household Income Expenditure and
Consumption Surveys (HIECS) conducted by CAPMAS, the official statistical agency in
Egypt. These surveys began in 1957 by the Egyptian government but were conducted on
an irregular basis in 1964/65, 1974/75, and 1981/982. It was not until 1990 that
CAPMAS began issuing the surveys every 5 years.
While these surveys are useful in understanding broad trends in poverty in Egypt,
they have significant limitations. First, nutritional and food related data is not readily
available. Second, the results and methods of calculating individual diets, which vary
between differing ages, sexes, occupation, and geography, are ambiguous, leading many
poverty researchers to use their own interpretive methodologies to calculate the
magnitude and dimensions of poverty. Third, the Institute of National Planning and
CAPMAS did not release their surveys in an individual household form nor did they
specify these differences and relative measurements. Furthermore, it is also unclear how
CAPMAS accounted for regional variations with food and non-food pricing, which would
clearly impact the construction of expenditure-based poverty lines. Finally, all of the
poverty lines utilized are based on consumer expenditure data, which does not account for
saving or borrowing from other sources.
As previously mentioned, the most consistent source of poverty analysis and
measurement comes from the Household, Income, Expenditure, and Consumption
Surveys for the years 1990/91, 1995/96, 1999/00, and 2004/05. These surveys were
administrated through CAPMAS using household specific poverty lines, including both a
standardized food and a nonfood poverty line. Economists Hanaa Kheir el Din and Heba
el-Laithy analyzed these surveys in conjunction with poverty-related data from the
Ministry of Economic Development, CAPMAS, and the World Bank databases. The data
is useful in observing patterns of growth and poverty in Egypt during this period.
1990 marks the initial period of consistent CAMPAS studies which were then
surveyed and issued every five years. According to the Poverty Assessment Update, these
surveys consist of large samples drawn from the whole country and contain data on
income/consumption and expenditures on over 600 items of goods and services. They
provide “a good source of information on the distribution of welfare within Egyptian
society.” Second, the continuity of data is important both for accuracy and consistency,
although during this period, there was limited methodical or empirical data available from
official sources. No nationally representative unit level data was available for public
usage from either government or private sources. Most of the scholars who analyze and
report poverty statistics on Egypt note this lack of formal or reliable data for poverty and
inequality.
According to El Laithy and Kheir El Din’s results, poverty—including measures
such as depth, severity, incidence, etc.—declined during the second half of the nineties.
This was an indirect result of the drastic GDP growth in 1994/95 compared to earlier
years, particularly with regard to extremely high incidences of poverty in Egypt
throughout the 1980’s. According to the author’s estimates and information from the
HIECS, the results were interpreted using poverty indicators that represented a person’s
ability to obtain basic food and nonfood needs. This was based on individual per capita
poverty lines and then measured and calculated using household poverty lines. The
incidence, depth, and severity of poverty were calculated by using aggregate poverty
measures from 1990 to 2005. According to this data, poverty fell from 24.18% of the
population in 1990/91 to 19.41% in 1995/96. It decreased further from 19.41% to 16.74%
in 1999/00. The poverty rate then increased from 16.74 to 19.56 percent in 2004/05. The
data also showed that both the depth and severity of poverty followed similar patterns.
Both measures decreased dramatically from 1990/91 to 1995/96, dropped further in
1999/00, and then increased in 2004/05.
In terms of household income inequality the gini coefficient (the measure of
inequality of wealth) decreased from 1990/91 to 1995/96 which indicated a better
distribution of wealth. From 1995/96 to 1999/00, the gini coefficient increased slightly
which demonstrated an increase of wealth inequality. However, from 1999/00 to 2004/05,
inequality decreased to its lowest relative level in the 15-year period. Inequality was
lowest in 2004/05, suggesting a more equitable distribution of wealth and a smaller
poverty gap. If this information is marginally correct, one could arguably conclude that
income distribution has improved from 1990-2005. This data, compared with the survey
data, provides a general and approximate conceptualization of poverty in Egypt.
Poverty in Egypt
When discussing ultra poverty, extreme impoverishment, and absolute poor groups in a
society, one is talking about the highly marginalized, vulnerable, and high-risk social
groups. In Datt, Joliffe, and Sharma’s profile of poverty in Egypt, they note some of the
common characteristics of those living in severe impoverishment. They use per capita
consumption as a measure of individual welfare to reflect individual preferences
conditional on prices and incomes. They also incorporate regional differences, size and
age composition of households and nonfood consumption preferences for relatively poor
households to portray a comprehensive profile of the levels of poverty in Egypt.
Accordingly, in 1997, about 15.7 million or 26.5 percent of the population in Egypt was
classified as poor. Within this group of poor, 5.1 million were determined to be living in
absolute poverty or ultra poor. While the poverty gap index and headcount index did not
show the severity of poverty, the poverty-gap and squared-poverty-gap indexes are the
worst in the rural regions. However the Gini coefficient is worse in the urban areas.
Datt and Joliffe’s research in Egypt correlate with some demographic
generalizations in poverty indicators and comparisons. For example, some of the poorest
households have larger households and higher dependency ratios. These households have
members who are between the ages of 0-15 or over 60 and would not traditionally
contribute to the sustainability and management of a household. Instead they depend on
other members of the family for financial, economic, and social support. Extreme poor
household compositions typically are larger than poor households with an average 8
family members while poor households are around 5.4 members. Female-headed
households are also vulnerable and are at risk to live in absolute impoverishment. The
ultra poor have a much higher percentage of family members who do not complete
primary school. Most work as casual wage laborers; employment that is rarely consistent
and highly vulnerable to shocks. Absolute poverty is prevalent in rural areas, specifically
Upper Egypt. About seventy-four percent of the ultra poor population lives in rural areas.
Levels of Poverty, Impoverishment, and Deprivation
A comprehensive report on Egypt was issued as the Poverty Assessment Update in 2007,
which looks at the same survey time periods as El Laithy and Kheir El Din’s research.
The Ministry of Economic Development and the World Bank developed this study,
emphasizing the necessity for some kind of agreement on poverty measurement in Egypt.
The assessment conceded that, while no single method to accurately indicate or measure
poverty exists, it was important not to confine poverty within the framework of only
measuring limited income. In order to comprehensively measure the state of deprivation,
one should use the multiple dimensions of indicators and data into account.
The Poverty Assessment Update attempts to obtain a general consensus on poverty
measurement with statistical and analytical support from Ravallion, El Laithy, Lokshin,
and Banerji’s research, as well as prior research on the subject from the World Bank
archives. It claims self-accuracy by using local prices and poverty lines adjusted to
household demographics throughout the report.
This poverty assessment uses three primary aggregate measures to account for the
‘multidimensionality’ of poverty.69 First, the head count index measures the prevalence of
poverty determined by a poverty line. It shows the percentage of poor as a proportion of
the total population. However, this indicator does not reflect the dynamics of distribution
of the poor that exist below the poverty line, but simply paints a static picture of poor vs.
non-poor. Second, the poverty gap index calculates the depth and magnitude of poverty—
the gap between low-income expenditure levels and the poverty line. Lastly, the poverty
severity index measures the degree of inequality in the distribution below the poverty
line, giving a greater weight to households at the bottom of expenditure or income
distribution.
Instead of setting a standard income or consumption line which is often used in
research on this subject, the assessment classifies poverty into three groups: extreme,
absolute, and near poverty. These three groups combined constitute the poor. Each
category has its own poverty line and is assessed by comparing household consumption
by HIECS representative survey. In 2005 dollar values, one dollar purchasing power
parity (PPP) is the equivalent to 2.57 Egyptian pounds. Dollars with the same purchasing
power in the United States, when conflated with goods and services, are more expensive
in the US, one PPP dollar per day is equivalent of much less than a current exchange rate
would imply. Those classified as extremely poor are considered as individuals who spend
less than 995 Egyptian pounds (in 2005 PPP value) per year. Absolute poor is classified as
those spending less than 1,423 pounds per year. Those who are near poor spend between
1,424 and 1,854 pounds per year. One can expand on this approach by breaking the
estimated poverty lines even further to account for age, gender, region, and household
size.
While previous poverty measurements ignored the significant differences in
consumption patterns and prices across the region, the assessment uses a cost-of-
basicneeds methodology in order to establish subsistence minimums. For example, it is
crucial for accuracy to account for different requirements of different household
members, to take economies of scale within the household into account, as well as to
consider that non-food items can be shared among household members. The methodology
used in this report can account for the problems with previous poverty research in Egypt.
Accordingly, Egypt follows an absolute poverty line with a focus on those who are
deprived of the ‘most basic needs,’ rather than those who potentially face deprivation
relative to their fellow citizens. Using the PPP exchange rate as a set value for the 95/96,
99/00, and 04/05 surveys, two internationally standard poverty lines are used in this
report. This allows for a broader understanding of the circumstances of minimum living
standards, defined as 1$ a day, and those who are more prone or vulnerable to poverty
denoted by 2$ a day.
In combining this poverty line with total poverty line, the food poverty line is
supplemented by an allowance for expenditure for essential non-food goods. The price of
non-food expenses is estimated by identifying the share of non-food expenditure for
households whose total expenditure was equivalent to the food poverty line. Poverty rates
are based on comparisons between actual expenditure and the cost of a consumption
basket securing 2,470 calories per day per person, along with some additional basic
services.
This report thus concludes that approximately forty percent of the population in
Egypt is clustered between one and two dollars per capita a day. It also notes that in
examining the poverty trends from 1996-2005, the poverty rate was 19.4% in 1996,
16.7% in 2000, and 19.6% in 2005. This confirms El Laithy and Kheir El Din’s estimates.
The assessment further reports that those who faced extreme poverty were at 2% in 1996,
2.9% in 2000, and 3.8% in 2005. Those that were near poverty were at 32% in 1996,
25.9% in 2000, and 29.9 percent in 2005. The poverty gap index was 3.4% in 1996, 3.0%
in 2000, and 3.6% in 2005. The poverty severity index was at 2% in 1996, 2.9% in 2000,
and 3.8% in 2005. These conclusions represent the overall poverty profile of Egypt during
this time period.
Furthermore, one can expand on the differences between deprivation and severe
deprivation. For example, according to Gordon’s deprivation scale, if an individual has a
body mass index under 16, they are severely underweight and therefore represent the
element of severe deprivation. The scale moves up to a body mass index of 18.5, anything
below this threshold would represent deprivation. Using the BMI to calculate health and
nourishment is useful. While it does not take into account individual preference, nutrition,
or food baskets, it does provide a general idea of a person’s health by using their height
and weight and oftentimes, age and gender. Clearly, there are variations for standard or
optimal BMI and this measure has many limitations. However, because the cut off for
severe deprivation is staggered to a very low BMI number, it can be very practical when
used with other deprivation indicators.
His scale also elaborates on specific criteria to determine the standards of his
scale. Each one differentiates between deprivation and severe deprivation. Although his
criteria are useful for understanding general thresholds for deprivation and severe
deprivation, they ignore a crucial factor, the perception of poverty.
In perceiving poverty on any scale, the role of inequality cannot be ignored.
Inequality can intensify poverty, not only in terms of statistical facts, but in opinions of
circumstance as well. If an individual is living in deprivation, that deprivation can seem
exaggerated if his neighbor is living in luxury. Therefore, the perception of poverty
cannot be ignored when looking at levels of deprivation.
Within any given community, certain individuals may not perceive themselves as
poor at all, even though they might not have access to health or educational facilities or
they live in mud floor houses without modern sanitation. By most standards, this would
constitute an extreme level of poverty. But if most of the community lived within these
same sets of living or social circumstances, their own interpretation of poverty would be
limited to their direct experience. For example, if everyone in an indigenous tribe in
South America lived in mud huts and used the local river for sustenance, inequality does
not seem readily apparent. There is not a large discrepancy between the different groups
in the tribe (although power and politics within any society are bound to play a role).
However if a particular few of that group have access to other facilities or modern
technology, or are even aware that it exists regardless of their lifestyle, they may perceive
their situation as more unequal and more dire than otherwise
For example, indigenous populations in South America may not view themselves
as living in severe poverty although they could potentially fall under that category
according to Gordon’s eight criteria. Some of these groups use rivers and ponds instead of
modern plumbing. They have no access to healthcare; they live in houses with mud floors
or no floors at all; they share space with four or more people per room; they have no
access to newspapers, radios, computers, or other modern information sources. While
many of these things may be true for large groups of marginalized peoples in societies,
they do not automatically infer severe poverty. These criteria are largely based on a
modern Western version of deprivation and minimum living standards, enhanced by
inequalities in a society. You cannot be a “have not” if you are not exposed to certain
assets that would allow you to “have” something in the first place.
Vulnerability
There are certain freedoms, choices, and rights that limit a person in poverty.
Deprivation reflects vulnerability; the poor are often at risk in terms of health, education,
social stability, or ill treatment and abuse by society or the state. The vulnerability
dimension is usually due to events in which an individual has no control. For example,
violence, disease, economic shocks and natural disasters all reinforce a person’s attitude
towards his own perception of poverty. Vulnerability, in this aspect, “exacerbates material
poverty and weakens their bargaining position” of groups at risk. The poor often have no
voice, control, or representation in their personal development. Vulnerability represents
the risk a household has of falling into poverty. These groups often fall into poverty
clusters and are highly sensitive to shocks such as emergency medical expenses, lost jobs,
natural disasters, bad business profits, etc. Vulnerability can be mitigated through giving
at-risk groups of society empowerment and their opportunities and security. Vulnerability
is crucial in the experience and processes of poverty.
Interpretation and Perception of Poverty
Interpretations of poverty and poorness are subjective. What constitutes poverty to
one individual may be perceived differently to another. Different poverty thresholds can
be determined by subjective poverty lines, which depend on the personal judgment of an
individual or household’s standard of living. The benefit of this threshold is that it
identifies poverty measurement as an intrinsically deduced judgment by a person of what
is acceptable as minimum living standard. Subjective poverty is more dependent on
personal perception and considerations by the population that is being measured. For
example, if the inequality rate is high in a country, the bottom quadrant of the population
may not be living in actual poverty. This group may perceive their poverty based on
comparisons to those with better living standards. Subjective poverty is an important
measure, but it can be problematic as it is inherently subject to individual preferences of
basic needs. These preferences are dynamic and differ based on relative criteria, such as
individual taste, location, gender, occupation, and price variations.
The perception of poverty plays an important role in understanding
impoverishment. A person’s individual perception of his own poverty greatly influences
his level of deprivation. A government’s perception of poverty would obviously play an
enormous role in determining social and welfare policy.
Subjective factors such as interpretation, poverty measurement, or methods for
quantifying growth demonstrate how poverty measures are conditional on the perception
of one’s understanding of poverty. This can be demonstrated by the nature and scale of
poverty studies in Egypt. Poverty analysis in Egypt differs widely in magnitude,
distribution, and incidence, illustrated by the various conflicting representations of
poverty in Egypt among current scholarship and research. Even more interesting is that
the majority of work on poverty in Egypt stems from the exact same survey data produced
by the Central Agency for Public Mobilization and Statistics and the Egyptian
government. Yet, although the data from CAPMAS is the only officially available data on
poverty figures in Egypt, different institutions, economists, and social researchers have
put a subjective spin on the overall results, painting a confusing and rather incoherent
picture of poverty in Egypt. This conflict arises from the different methodologies and
poverty lines used to indicate social welfare. Frequently, it is merely a minor change in
percentages of poverty measurement indexes. However, in the broader situation, millions
of people might be ignored or incorrectly aggregated into an author’s subjective category
of poverty.
Poverty in the Egyptian Context:
Poverty Research and Methodologies in Egypt
When considering the effects of political policy, economic reform, and social funding
directed toward welfare and well being in developing countries, policy formation should
focus on the importance of objective poverty research and accountability.
Poverty analysis and scholarship in Egypt are gathered from many different
authorities; from institutions such as the World Bank or IFPRI, private researchers,
Egyptian economists or other political economy scientists researching poverty statistics.
Most of these reports use primary data from Household Income Expenditure and
Consumption Surveys (HIECS) conducted by CAPMAS, the official statistical agency in
Egypt. These surveys began in 1957 by the Egyptian government but were conducted on
an irregular basis in 1964/65, 1974/75, and 1981/982. It was not until 1990 that
CAPMAS began issuing the surveys every 5 years.
While these surveys are useful in understanding broad trends in poverty in Egypt,
they have significant limitations. First, nutritional and food related data is not readily
available. Second, the results and methods of calculating individual diets, which vary
between differing ages, sexes, occupation, and geography, are ambiguous, leading many
poverty researchers to use their own interpretive methodologies to calculate the
magnitude and dimensions of poverty. Third, the Institute of National Planning and
CAPMAS did not release their surveys in an individual household form nor did they
specify these differences and relative measurements. Furthermore, it is also unclear how
CAPMAS accounted for regional variations with food and non-food pricing, which would
clearly impact the construction of expenditure-based poverty lines. Finally, all of the
poverty lines utilized are based on consumer expenditure data, which does not account for
saving or borrowing from other sources.
As previously mentioned, the most consistent source of poverty analysis and
measurement comes from the Household, Income, Expenditure, and Consumption
Surveys for the years 1990/91, 1995/96, 1999/00, and 2004/05. These surveys were
administrated through CAPMAS using household specific poverty lines, including both a
standardized food and a nonfood poverty line. Economists Hanaa Kheir el Din and Heba
el-Laithy analyzed these surveys in conjunction with poverty-related data from the
Ministry of Economic Development, CAPMAS, and the World Bank databases. The data
is useful in observing patterns of growth and poverty in Egypt during this period.
1990 marks the initial period of consistent CAMPAS studies which were then
surveyed and issued every five years. According to the Poverty Assessment Update, these
surveys consist of large samples drawn from the whole country and contain data on
income/consumption and expenditures on over 600 items of goods and services. They
provide “a good source of information on the distribution of welfare within Egyptian
society.” Second, the continuity of data is important both for accuracy and consistency,
although during this period, there was limited methodical or empirical data available from
official sources. No nationally representative unit level data was available for public
usage from either government or private sources. Most of the scholars who analyze and
report poverty statistics on Egypt note this lack of formal or reliable data for poverty and
inequality.
According to El Laithy and Kheir El Din’s results, poverty—including measures
such as depth, severity, incidence, etc.—declined during the second half of the nineties.
This was an indirect result of the drastic GDP growth in 1994/95 compared to earlier
years, particularly with regard to extremely high incidences of poverty in Egypt
throughout the 1980’s. According to the author’s estimates and information from the
HIECS, the results were interpreted using poverty indicators that represented a person’s
ability to obtain basic food and nonfood needs. This was based on individual per capita
poverty lines and then measured and calculated using household poverty lines. The
incidence, depth, and severity of poverty were calculated by using aggregate poverty
measures from 1990 to 2005. According to this data, poverty fell from 24.18% of the
population in 1990/91 to 19.41% in 1995/96. It decreased further from 19.41% to 16.74%
in 1999/00. The poverty rate then increased from 16.74 to 19.56 percent in 2004/05. The
data also showed that both the depth and severity of poverty followed similar patterns.
Both measures decreased dramatically from 1990/91 to 1995/96, dropped further in
1999/00, and then increased in 2004/05.
In terms of household income inequality the gini coefficient (the measure of
inequality of wealth) decreased from 1990/91 to 1995/96 which indicated a better
distribution of wealth. From 1995/96 to 1999/00, the gini coefficient increased slightly
which demonstrated an increase of wealth inequality. However, from 1999/00 to 2004/05,
inequality decreased to its lowest relative level in the 15-year period. Inequality was
lowest in 2004/05, suggesting a more equitable distribution of wealth and a smaller
poverty gap. If this information is marginally correct, one could arguably conclude that
income distribution has improved from 1990-2005. This data, compared with the survey
data, provides a general and approximate conceptualization of poverty in Egypt.
Poverty in Egypt
When discussing ultra poverty, extreme impoverishment, and absolute poor groups in a
society, one is talking about the highly marginalized, vulnerable, and high-risk social
groups. In Datt, Joliffe, and Sharma’s profile of poverty in Egypt, they note some of the
common characteristics of those living in severe impoverishment. They use per capita
consumption as a measure of individual welfare to reflect individual preferences
conditional on prices and incomes. They also incorporate regional differences, size and
age composition of households and nonfood consumption preferences for relatively poor
households to portray a comprehensive profile of the levels of poverty in Egypt.
Accordingly, in 1997, about 15.7 million or 26.5 percent of the population in Egypt was
classified as poor. Within this group of poor, 5.1 million were determined to be living in
absolute poverty or ultra poor. While the poverty gap index and headcount index did not
show the severity of poverty, the poverty-gap and squared-poverty-gap indexes are the
worst in the rural regions. However the Gini coefficient is worse in the urban areas.
Datt and Joliffe’s research in Egypt correlate with some demographic
generalizations in poverty indicators and comparisons. For example, some of the poorest
households have larger households and higher dependency ratios. These households have
members who are between the ages of 0-15 or over 60 and would not traditionally
contribute to the sustainability and management of a household. Instead they depend on
other members of the family for financial, economic, and social support. Extreme poor
household compositions typically are larger than poor households with an average 8
family members while poor households are around 5.4 members. Female-headed
households are also vulnerable and are at risk to live in absolute impoverishment. The
ultra poor have a much higher percentage of family members who do not complete
primary school. Most work as casual wage laborers; employment that is rarely consistent
and highly vulnerable to shocks. Absolute poverty is prevalent in rural areas, specifically
Upper Egypt. About seventy-four percent of the ultra poor population lives in rural areas.
Levels of Poverty, Impoverishment, and Deprivation
A comprehensive report on Egypt was issued as the Poverty Assessment Update in 2007,
which looks at the same survey time periods as El Laithy and Kheir El Din’s research.
The Ministry of Economic Development and the World Bank developed this study,
emphasizing the necessity for some kind of agreement on poverty measurement in Egypt.
The assessment conceded that, while no single method to accurately indicate or measure
poverty exists, it was important not to confine poverty within the framework of only
measuring limited income. In order to comprehensively measure the state of deprivation,
one should use the multiple dimensions of indicators and data into account.
The Poverty Assessment Update attempts to obtain a general consensus on poverty
measurement with statistical and analytical support from Ravallion, El Laithy, Lokshin,
and Banerji’s research, as well as prior research on the subject from the World Bank
archives. It claims self-accuracy by using local prices and poverty lines adjusted to
household demographics throughout the report.
This poverty assessment uses three primary aggregate measures to account for the
‘multidimensionality’ of poverty.69 First, the head count index measures the prevalence of
poverty determined by a poverty line. It shows the percentage of poor as a proportion of
the total population. However, this indicator does not reflect the dynamics of distribution
of the poor that exist below the poverty line, but simply paints a static picture of poor vs.
non-poor. Second, the poverty gap index calculates the depth and magnitude of poverty—
the gap between low-income expenditure levels and the poverty line. Lastly, the poverty
severity index measures the degree of inequality in the distribution below the poverty
line, giving a greater weight to households at the bottom of expenditure or income
distribution.
Instead of setting a standard income or consumption line which is often used in
research on this subject, the assessment classifies poverty into three groups: extreme,
absolute, and near poverty. These three groups combined constitute the poor. Each
category has its own poverty line and is assessed by comparing household consumption
by HIECS representative survey. In 2005 dollar values, one dollar purchasing power
parity (PPP) is the equivalent to 2.57 Egyptian pounds. Dollars with the same purchasing
power in the United States, when conflated with goods and services, are more expensive
in the US, one PPP dollar per day is equivalent of much less than a current exchange rate
would imply. Those classified as extremely poor are considered as individuals who spend
less than 995 Egyptian pounds (in 2005 PPP value) per year. Absolute poor is classified as
those spending less than 1,423 pounds per year. Those who are near poor spend between
1,424 and 1,854 pounds per year. One can expand on this approach by breaking the
estimated poverty lines even further to account for age, gender, region, and household
size.
While previous poverty measurements ignored the significant differences in
consumption patterns and prices across the region, the assessment uses a cost-of-
basicneeds methodology in order to establish subsistence minimums. For example, it is
crucial for accuracy to account for different requirements of different household
members, to take economies of scale within the household into account, as well as to
consider that non-food items can be shared among household members. The methodology
used in this report can account for the problems with previous poverty research in Egypt.
Accordingly, Egypt follows an absolute poverty line with a focus on those who are
deprived of the ‘most basic needs,’ rather than those who potentially face deprivation
relative to their fellow citizens. Using the PPP exchange rate as a set value for the 95/96,
99/00, and 04/05 surveys, two internationally standard poverty lines are used in this
report. This allows for a broader understanding of the circumstances of minimum living
standards, defined as 1$ a day, and those who are more prone or vulnerable to poverty
denoted by 2$ a day.
In combining this poverty line with total poverty line, the food poverty line is
supplemented by an allowance for expenditure for essential non-food goods. The price of
non-food expenses is estimated by identifying the share of non-food expenditure for
households whose total expenditure was equivalent to the food poverty line. Poverty rates
are based on comparisons between actual expenditure and the cost of a consumption
basket securing 2,470 calories per day per person, along with some additional basic
services.
This report thus concludes that approximately forty percent of the population in
Egypt is clustered between one and two dollars per capita a day. It also notes that in
examining the poverty trends from 1996-2005, the poverty rate was 19.4% in 1996,
16.7% in 2000, and 19.6% in 2005. This confirms El Laithy and Kheir El Din’s estimates.
The assessment further reports that those who faced extreme poverty were at 2% in 1996,
2.9% in 2000, and 3.8% in 2005. Those that were near poverty were at 32% in 1996,
25.9% in 2000, and 29.9 percent in 2005. The poverty gap index was 3.4% in 1996, 3.0%
in 2000, and 3.6% in 2005. The poverty severity index was at 2% in 1996, 2.9% in 2000,
and 3.8% in 2005. These conclusions represent the overall poverty profile of Egypt during
this time period.
Furthermore, one can expand on the differences between deprivation and severe
deprivation. For example, according to Gordon’s deprivation scale, if an individual has a
body mass index under 16, they are severely underweight and therefore represent the
element of severe deprivation. The scale moves up to a body mass index of 18.5, anything
below this threshold would represent deprivation. Using the BMI to calculate health and
nourishment is useful. While it does not take into account individual preference, nutrition,
or food baskets, it does provide a general idea of a person’s health by using their height
and weight and oftentimes, age and gender. Clearly, there are variations for standard or
optimal BMI and this measure has many limitations. However, because the cut off for
severe deprivation is staggered to a very low BMI number, it can be very practical when
used with other deprivation indicators.
His scale also elaborates on specific criteria to determine the standards of his
scale. Each one differentiates between deprivation and severe deprivation. Although his
criteria are useful for understanding general thresholds for deprivation and severe
deprivation, they ignore a crucial factor, the perception of poverty.
In perceiving poverty on any scale, the role of inequality cannot be ignored.
Inequality can intensify poverty, not only in terms of statistical facts, but in opinions of
circumstance as well. If an individual is living in deprivation, that deprivation can seem
exaggerated if his neighbor is living in luxury. Therefore, the perception of poverty
cannot be ignored when looking at levels of deprivation.
Within any given community, certain individuals may not perceive themselves as
poor at all, even though they might not have access to health or educational facilities or
they live in mud floor houses without modern sanitation. By most standards, this would
constitute an extreme level of poverty. But if most of the community lived within these
same sets of living or social circumstances, their own interpretation of poverty would be
limited to their direct experience. For example, if everyone in an indigenous tribe in
South America lived in mud huts and used the local river for sustenance, inequality does
not seem readily apparent. There is not a large discrepancy between the different groups
in the tribe (although power and politics within any society are bound to play a role).
However if a particular few of that group have access to other facilities or modern
technology, or are even aware that it exists regardless of their lifestyle, they may perceive
their situation as more unequal and more dire than otherwise
For example, indigenous populations in South America may not view themselves
as living in severe poverty although they could potentially fall under that category
according to Gordon’s eight criteria. Some of these groups use rivers and ponds instead of
modern plumbing. They have no access to healthcare; they live in houses with mud floors
or no floors at all; they share space with four or more people per room; they have no
access to newspapers, radios, computers, or other modern information sources. While
many of these things may be true for large groups of marginalized peoples in societies,
they do not automatically infer severe poverty. These criteria are largely based on a
modern Western version of deprivation and minimum living standards, enhanced by
inequalities in a society. You cannot be a “have not” if you are not exposed to certain
assets that would allow you to “have” something in the first place.
Vulnerability
There are certain freedoms, choices, and rights that limit a person in poverty.
Deprivation reflects vulnerability; the poor are often at risk in terms of health, education,
social stability, or ill treatment and abuse by society or the state. The vulnerability
dimension is usually due to events in which an individual has no control. For example,
violence, disease, economic shocks and natural disasters all reinforce a person’s attitude
towards his own perception of poverty. Vulnerability, in this aspect, “exacerbates material
poverty and weakens their bargaining position” of groups at risk. The poor often have no
voice, control, or representation in their personal development. Vulnerability represents
the risk a household has of falling into poverty. These groups often fall into poverty
clusters and are highly sensitive to shocks such as emergency medical expenses, lost jobs,
natural disasters, bad business profits, etc. Vulnerability can be mitigated through giving
at-risk groups of society empowerment and their opportunities and security. Vulnerability
is crucial in the experience and processes of poverty.
Interpretation and Perception of Poverty
Interpretations of poverty and poorness are subjective. What constitutes poverty to
one individual may be perceived differently to another. Different poverty thresholds can
be determined by subjective poverty lines, which depend on the personal judgment of an
individual or household’s standard of living. The benefit of this threshold is that it
identifies poverty measurement as an intrinsically deduced judgment by a person of what
is acceptable as minimum living standard. Subjective poverty is more dependent on
personal perception and considerations by the population that is being measured. For
example, if the inequality rate is high in a country, the bottom quadrant of the population
may not be living in actual poverty. This group may perceive their poverty based on
comparisons to those with better living standards. Subjective poverty is an important
measure, but it can be problematic as it is inherently subject to individual preferences of
basic needs. These preferences are dynamic and differ based on relative criteria, such as
individual taste, location, gender, occupation, and price variations.
The perception of poverty plays an important role in understanding
impoverishment. A person’s individual perception of his own poverty greatly influences
his level of deprivation. A government’s perception of poverty would obviously play an
enormous role in determining social and welfare policy.
Subjective factors such as interpretation, poverty measurement, or methods for
quantifying growth demonstrate how poverty measures are conditional on the perception
of one’s understanding of poverty. This can be demonstrated by the nature and scale of
poverty studies in Egypt. Poverty analysis in Egypt differs widely in magnitude,
distribution, and incidence, illustrated by the various conflicting representations of
poverty in Egypt among current scholarship and research. Even more interesting is that
the majority of work on poverty in Egypt stems from the exact same survey data produced
by the Central Agency for Public Mobilization and Statistics and the Egyptian
government. Yet, although the data from CAPMAS is the only officially available data on
poverty figures in Egypt, different institutions, economists, and social researchers have
put a subjective spin on the overall results, painting a confusing and rather incoherent
picture of poverty in Egypt. This conflict arises from the different methodologies and
poverty lines used to indicate social welfare. Frequently, it is merely a minor change in
percentages of poverty measurement indexes. However, in the broader situation, millions
of people might be ignored or incorrectly aggregated into an author’s subjective category
of poverty.
Poverty in the Egyptian Context:
Poverty Research and Methodologies in Egypt
When considering the effects of political policy, economic reform, and social funding
directed toward welfare and well being in developing countries, policy formation should
focus on the importance of objective poverty research and accountability.
Poverty analysis and scholarship in Egypt are gathered from many different
authorities; from institutions such as the World Bank or IFPRI, private researchers,
Egyptian economists or other political economy scientists researching poverty statistics.
Most of these reports use primary data from Household Income Expenditure and
Consumption Surveys (HIECS) conducted by CAPMAS, the official statistical agency in
Egypt. These surveys began in 1957 by the Egyptian government but were conducted on
an irregular basis in 1964/65, 1974/75, and 1981/982. It was not until 1990 that
CAPMAS began issuing the surveys every 5 years.
While these surveys are useful in understanding broad trends in poverty in Egypt,
they have significant limitations. First, nutritional and food related data is not readily
available. Second, the results and methods of calculating individual diets, which vary
between differing ages, sexes, occupation, and geography, are ambiguous, leading many
poverty researchers to use their own interpretive methodologies to calculate the
magnitude and dimensions of poverty. Third, the Institute of National Planning and
CAPMAS did not release their surveys in an individual household form nor did they
specify these differences and relative measurements. Furthermore, it is also unclear how
CAPMAS accounted for regional variations with food and non-food pricing, which would
clearly impact the construction of expenditure-based poverty lines. Finally, all of the
poverty lines utilized are based on consumer expenditure data, which does not account for
saving or borrowing from other sources.
As previously mentioned, the most consistent source of poverty analysis and
measurement comes from the Household, Income, Expenditure, and Consumption
Surveys for the years 1990/91, 1995/96, 1999/00, and 2004/05. These surveys were
administrated through CAPMAS using household specific poverty lines, including both a
standardized food and a nonfood poverty line. Economists Hanaa Kheir el Din and Heba
el-Laithy analyzed these surveys in conjunction with poverty-related data from the
Ministry of Economic Development, CAPMAS, and the World Bank databases. The data
is useful in observing patterns of growth and poverty in Egypt during this period.
1990 marks the initial period of consistent CAMPAS studies which were then
surveyed and issued every five years. According to the Poverty Assessment Update, these
surveys consist of large samples drawn from the whole country and contain data on
income/consumption and expenditures on over 600 items of goods and services. They
provide “a good source of information on the distribution of welfare within Egyptian
society.” Second, the continuity of data is important both for accuracy and consistency,
although during this period, there was limited methodical or empirical data available from
official sources. No nationally representative unit level data was available for public
usage from either government or private sources. Most of the scholars who analyze and
report poverty statistics on Egypt note this lack of formal or reliable data for poverty and
inequality.
According to El Laithy and Kheir El Din’s results, poverty—including measures
such as depth, severity, incidence, etc.—declined during the second half of the nineties.
This was an indirect result of the drastic GDP growth in 1994/95 compared to earlier
years, particularly with regard to extremely high incidences of poverty in Egypt
throughout the 1980’s. According to the author’s estimates and information from the
HIECS, the results were interpreted using poverty indicators that represented a person’s
ability to obtain basic food and nonfood needs. This was based on individual per capita
poverty lines and then measured and calculated using household poverty lines. The
incidence, depth, and severity of poverty were calculated by using aggregate poverty
measures from 1990 to 2005. According to this data, poverty fell from 24.18% of the
population in 1990/91 to 19.41% in 1995/96. It decreased further from 19.41% to 16.74%
in 1999/00. The poverty rate then increased from 16.74 to 19.56 percent in 2004/05. The
data also showed that both the depth and severity of poverty followed similar patterns.
Both measures decreased dramatically from 1990/91 to 1995/96, dropped further in
1999/00, and then increased in 2004/05.
In terms of household income inequality the gini coefficient (the measure of
inequality of wealth) decreased from 1990/91 to 1995/96 which indicated a better
distribution of wealth. From 1995/96 to 1999/00, the gini coefficient increased slightly
which demonstrated an increase of wealth inequality. However, from 1999/00 to 2004/05,
inequality decreased to its lowest relative level in the 15-year period. Inequality was
lowest in 2004/05, suggesting a more equitable distribution of wealth and a smaller
poverty gap. If this information is marginally correct, one could arguably conclude that
income distribution has improved from 1990-2005. This data, compared with the survey
data, provides a general and approximate conceptualization of poverty in Egypt.
Poverty in Egypt
When discussing ultra poverty, extreme impoverishment, and absolute poor groups in a
society, one is talking about the highly marginalized, vulnerable, and high-risk social
groups. In Datt, Joliffe, and Sharma’s profile of poverty in Egypt, they note some of the
common characteristics of those living in severe impoverishment. They use per capita
consumption as a measure of individual welfare to reflect individual preferences
conditional on prices and incomes. They also incorporate regional differences, size and
age composition of households and nonfood consumption preferences for relatively poor
households to portray a comprehensive profile of the levels of poverty in Egypt.
Accordingly, in 1997, about 15.7 million or 26.5 percent of the population in Egypt was
classified as poor. Within this group of poor, 5.1 million were determined to be living in
absolute poverty or ultra poor. While the poverty gap index and headcount index did not
show the severity of poverty, the poverty-gap and squared-poverty-gap indexes are the
worst in the rural regions. However the Gini coefficient is worse in the urban areas.
Datt and Joliffe’s research in Egypt correlate with some demographic
generalizations in poverty indicators and comparisons. For example, some of the poorest
households have larger households and higher dependency ratios. These households have
members who are between the ages of 0-15 or over 60 and would not traditionally
contribute to the sustainability and management of a household. Instead they depend on
other members of the family for financial, economic, and social support. Extreme poor
household compositions typically are larger than poor households with an average 8
family members while poor households are around 5.4 members. Female-headed
households are also vulnerable and are at risk to live in absolute impoverishment. The
ultra poor have a much higher percentage of family members who do not complete
primary school. Most work as casual wage laborers; employment that is rarely consistent
and highly vulnerable to shocks. Absolute poverty is prevalent in rural areas, specifically
Upper Egypt. About seventy-four percent of the ultra poor population lives in rural areas.
Levels of Poverty, Impoverishment, and Deprivation
A comprehensive report on Egypt was issued as the Poverty Assessment Update in 2007,
which looks at the same survey time periods as El Laithy and Kheir El Din’s research.
The Ministry of Economic Development and the World Bank developed this study,
emphasizing the necessity for some kind of agreement on poverty measurement in Egypt.
The assessment conceded that, while no single method to accurately indicate or measure
poverty exists, it was important not to confine poverty within the framework of only
measuring limited income. In order to comprehensively measure the state of deprivation,
one should use the multiple dimensions of indicators and data into account.
The Poverty Assessment Update attempts to obtain a general consensus on poverty
measurement with statistical and analytical support from Ravallion, El Laithy, Lokshin,
and Banerji’s research, as well as prior research on the subject from the World Bank
archives. It claims self-accuracy by using local prices and poverty lines adjusted to
household demographics throughout the report.
This poverty assessment uses three primary aggregate measures to account for the
‘multidimensionality’ of poverty.69 First, the head count index measures the prevalence of
poverty determined by a poverty line. It shows the percentage of poor as a proportion of
the total population. However, this indicator does not reflect the dynamics of distribution
of the poor that exist below the poverty line, but simply paints a static picture of poor vs.
non-poor. Second, the poverty gap index calculates the depth and magnitude of poverty—
the gap between low-income expenditure levels and the poverty line. Lastly, the poverty
severity index measures the degree of inequality in the distribution below the poverty
line, giving a greater weight to households at the bottom of expenditure or income
distribution.
Instead of setting a standard income or consumption line which is often used in
research on this subject, the assessment classifies poverty into three groups: extreme,
absolute, and near poverty. These three groups combined constitute the poor. Each
category has its own poverty line and is assessed by comparing household consumption
by HIECS representative survey. In 2005 dollar values, one dollar purchasing power
parity (PPP) is the equivalent to 2.57 Egyptian pounds. Dollars with the same purchasing
power in the United States, when conflated with goods and services, are more expensive
in the US, one PPP dollar per day is equivalent of much less than a current exchange rate
would imply. Those classified as extremely poor are considered as individuals who spend
less than 995 Egyptian pounds (in 2005 PPP value) per year. Absolute poor is classified as
those spending less than 1,423 pounds per year. Those who are near poor spend between
1,424 and 1,854 pounds per year. One can expand on this approach by breaking the
estimated poverty lines even further to account for age, gender, region, and household
size.
While previous poverty measurements ignored the significant differences in
consumption patterns and prices across the region, the assessment uses a cost-of-
basicneeds methodology in order to establish subsistence minimums. For example, it is
crucial for accuracy to account for different requirements of different household
members, to take economies of scale within the household into account, as well as to
consider that non-food items can be shared among household members. The methodology
used in this report can account for the problems with previous poverty research in Egypt.
Accordingly, Egypt follows an absolute poverty line with a focus on those who are
deprived of the ‘most basic needs,’ rather than those who potentially face deprivation
relative to their fellow citizens. Using the PPP exchange rate as a set value for the 95/96,
99/00, and 04/05 surveys, two internationally standard poverty lines are used in this
report. This allows for a broader understanding of the circumstances of minimum living
standards, defined as 1$ a day, and those who are more prone or vulnerable to poverty
denoted by 2$ a day.
In combining this poverty line with total poverty line, the food poverty line is
supplemented by an allowance for expenditure for essential non-food goods. The price of
non-food expenses is estimated by identifying the share of non-food expenditure for
households whose total expenditure was equivalent to the food poverty line. Poverty rates
are based on comparisons between actual expenditure and the cost of a consumption
basket securing 2,470 calories per day per person, along with some additional basic
services.
This report thus concludes that approximately forty percent of the population in
Egypt is clustered between one and two dollars per capita a day. It also notes that in
examining the poverty trends from 1996-2005, the poverty rate was 19.4% in 1996,
16.7% in 2000, and 19.6% in 2005. This confirms El Laithy and Kheir El Din’s estimates.
The assessment further reports that those who faced extreme poverty were at 2% in 1996,
2.9% in 2000, and 3.8% in 2005. Those that were near poverty were at 32% in 1996,
25.9% in 2000, and 29.9 percent in 2005. The poverty gap index was 3.4% in 1996, 3.0%
in 2000, and 3.6% in 2005. The poverty severity index was at 2% in 1996, 2.9% in 2000,
and 3.8% in 2005. These conclusions represent the overall poverty profile of Egypt during
this time period.
Furthermore, one can expand on the differences between deprivation and severe
deprivation. For example, according to Gordon’s deprivation scale, if an individual has a
body mass index under 16, they are severely underweight and therefore represent the
element of severe deprivation. The scale moves up to a body mass index of 18.5, anything
below this threshold would represent deprivation. Using the BMI to calculate health and
nourishment is useful. While it does not take into account individual preference, nutrition,
or food baskets, it does provide a general idea of a person’s health by using their height
and weight and oftentimes, age and gender. Clearly, there are variations for standard or
optimal BMI and this measure has many limitations. However, because the cut off for
severe deprivation is staggered to a very low BMI number, it can be very practical when
used with other deprivation indicators.
His scale also elaborates on specific criteria to determine the standards of his
scale. Each one differentiates between deprivation and severe deprivation. Although his
criteria are useful for understanding general thresholds for deprivation and severe
deprivation, they ignore a crucial factor, the perception of poverty.
In perceiving poverty on any scale, the role of inequality cannot be ignored.
Inequality can intensify poverty, not only in terms of statistical facts, but in opinions of
circumstance as well. If an individual is living in deprivation, that deprivation can seem
exaggerated if his neighbor is living in luxury. Therefore, the perception of poverty
cannot be ignored when looking at levels of deprivation.
Within any given community, certain individuals may not perceive themselves as
poor at all, even though they might not have access to health or educational facilities or
they live in mud floor houses without modern sanitation. By most standards, this would
constitute an extreme level of poverty. But if most of the community lived within these
same sets of living or social circumstances, their own interpretation of poverty would be
limited to their direct experience. For example, if everyone in an indigenous tribe in
South America lived in mud huts and used the local river for sustenance, inequality does
not seem readily apparent. There is not a large discrepancy between the different groups
in the tribe (although power and politics within any society are bound to play a role).
However if a particular few of that group have access to other facilities or modern
technology, or are even aware that it exists regardless of their lifestyle, they may perceive
their situation as more unequal and more dire than otherwise
For example, indigenous populations in South America may not view themselves
as living in severe poverty although they could potentially fall under that category
according to Gordon’s eight criteria. Some of these groups use rivers and ponds instead of
modern plumbing. They have no access to healthcare; they live in houses with mud floors
or no floors at all; they share space with four or more people per room; they have no
access to newspapers, radios, computers, or other modern information sources. While
many of these things may be true for large groups of marginalized peoples in societies,
they do not automatically infer severe poverty. These criteria are largely based on a
modern Western version of deprivation and minimum living standards, enhanced by
inequalities in a society. You cannot be a “have not” if you are not exposed to certain
assets that would allow you to “have” something in the first place.
Vulnerability
There are certain freedoms, choices, and rights that limit a person in poverty.
Deprivation reflects vulnerability; the poor are often at risk in terms of health, education,
social stability, or ill treatment and abuse by society or the state. The vulnerability
dimension is usually due to events in which an individual has no control. For example,
violence, disease, economic shocks and natural disasters all reinforce a person’s attitude
towards his own perception of poverty. Vulnerability, in this aspect, “exacerbates material
poverty and weakens their bargaining position” of groups at risk. The poor often have no
voice, control, or representation in their personal development. Vulnerability represents
the risk a household has of falling into poverty. These groups often fall into poverty
clusters and are highly sensitive to shocks such as emergency medical expenses, lost jobs,
natural disasters, bad business profits, etc. Vulnerability can be mitigated through giving
at-risk groups of society empowerment and their opportunities and security. Vulnerability
is crucial in the experience and processes of poverty.
Interpretation and Perception of Poverty
Interpretations of poverty and poorness are subjective. What constitutes poverty to
one individual may be perceived differently to another. Different poverty thresholds can
be determined by subjective poverty lines, which depend on the personal judgment of an
individual or household’s standard of living. The benefit of this threshold is that it
identifies poverty measurement as an intrinsically deduced judgment by a person of what
is acceptable as minimum living standard. Subjective poverty is more dependent on
personal perception and considerations by the population that is being measured. For
example, if the inequality rate is high in a country, the bottom quadrant of the population
may not be living in actual poverty. This group may perceive their poverty based on
comparisons to those with better living standards. Subjective poverty is an important
measure, but it can be problematic as it is inherently subject to individual preferences of
basic needs. These preferences are dynamic and differ based on relative criteria, such as
individual taste, location, gender, occupation, and price variations.
The perception of poverty plays an important role in understanding
impoverishment. A person’s individual perception of his own poverty greatly influences
his level of deprivation. A government’s perception of poverty would obviously play an
enormous role in determining social and welfare policy.
Subjective factors such as interpretation, poverty measurement, or methods for
quantifying growth demonstrate how poverty measures are conditional on the perception
of one’s understanding of poverty. This can be demonstrated by the nature and scale of
poverty studies in Egypt. Poverty analysis in Egypt differs widely in magnitude,
distribution, and incidence, illustrated by the various conflicting representations of
poverty in Egypt among current scholarship and research. Even more interesting is that
the majority of work on poverty in Egypt stems from the exact same survey data produced
by the Central Agency for Public Mobilization and Statistics and the Egyptian
government. Yet, although the data from CAPMAS is the only officially available data on
poverty figures in Egypt, different institutions, economists, and social researchers have
put a subjective spin on the overall results, painting a confusing and rather incoherent
picture of poverty in Egypt. This conflict arises from the different methodologies and
poverty lines used to indicate social welfare. Frequently, it is merely a minor change in
percentages of poverty measurement indexes. However, in the broader situation, millions
of people might be ignored or incorrectly aggregated into an author’s subjective category
of poverty.
Poverty in the Egyptian Context:
Poverty Research and Methodologies in Egypt
When considering the effects of political policy, economic reform, and social funding
directed toward welfare and well being in developing countries, policy formation should
focus on the importance of objective poverty research and accountability.
Poverty analysis and scholarship in Egypt are gathered from many different
authorities; from institutions such as the World Bank or IFPRI, private researchers,
Egyptian economists or other political economy scientists researching poverty statistics.
Most of these reports use primary data from Household Income Expenditure and
Consumption Surveys (HIECS) conducted by CAPMAS, the official statistical agency in
Egypt. These surveys began in 1957 by the Egyptian government but were conducted on
an irregular basis in 1964/65, 1974/75, and 1981/982. It was not until 1990 that
CAPMAS began issuing the surveys every 5 years.
While these surveys are useful in understanding broad trends in poverty in Egypt,
they have significant limitations. First, nutritional and food related data is not readily
available. Second, the results and methods of calculating individual diets, which vary
between differing ages, sexes, occupation, and geography, are ambiguous, leading many
poverty researchers to use their own interpretive methodologies to calculate the
magnitude and dimensions of poverty. Third, the Institute of National Planning and
CAPMAS did not release their surveys in an individual household form nor did they
specify these differences and relative measurements. Furthermore, it is also unclear how
CAPMAS accounted for regional variations with food and non-food pricing, which would
clearly impact the construction of expenditure-based poverty lines. Finally, all of the
poverty lines utilized are based on consumer expenditure data, which does not account for
saving or borrowing from other sources.
As previously mentioned, the most consistent source of poverty analysis and
measurement comes from the Household, Income, Expenditure, and Consumption
Surveys for the years 1990/91, 1995/96, 1999/00, and 2004/05. These surveys were
administrated through CAPMAS using household specific poverty lines, including both a
standardized food and a nonfood poverty line. Economists Hanaa Kheir el Din and Heba
el-Laithy analyzed these surveys in conjunction with poverty-related data from the
Ministry of Economic Development, CAPMAS, and the World Bank databases. The data
is useful in observing patterns of growth and poverty in Egypt during this period.
1990 marks the initial period of consistent CAMPAS studies which were then
surveyed and issued every five years. According to the Poverty Assessment Update, these
surveys consist of large samples drawn from the whole country and contain data on
income/consumption and expenditures on over 600 items of goods and services. They
provide “a good source of information on the distribution of welfare within Egyptian
society.” Second, the continuity of data is important both for accuracy and consistency,
although during this period, there was limited methodical or empirical data available from
official sources. No nationally representative unit level data was available for public
usage from either government or private sources. Most of the scholars who analyze and
report poverty statistics on Egypt note this lack of formal or reliable data for poverty and
inequality.
According to El Laithy and Kheir El Din’s results, poverty—including measures
such as depth, severity, incidence, etc.—declined during the second half of the nineties.
This was an indirect result of the drastic GDP growth in 1994/95 compared to earlier
years, particularly with regard to extremely high incidences of poverty in Egypt
throughout the 1980’s. According to the author’s estimates and information from the
HIECS, the results were interpreted using poverty indicators that represented a person’s
ability to obtain basic food and nonfood needs. This was based on individual per capita
poverty lines and then measured and calculated using household poverty lines. The
incidence, depth, and severity of poverty were calculated by using aggregate poverty
measures from 1990 to 2005. According to this data, poverty fell from 24.18% of the
population in 1990/91 to 19.41% in 1995/96. It decreased further from 19.41% to 16.74%
in 1999/00. The poverty rate then increased from 16.74 to 19.56 percent in 2004/05. The
data also showed that both the depth and severity of poverty followed similar patterns.
Both measures decreased dramatically from 1990/91 to 1995/96, dropped further in
1999/00, and then increased in 2004/05.
In terms of household income inequality the gini coefficient (the measure of
inequality of wealth) decreased from 1990/91 to 1995/96 which indicated a better
distribution of wealth. From 1995/96 to 1999/00, the gini coefficient increased slightly
which demonstrated an increase of wealth inequality. However, from 1999/00 to 2004/05,
inequality decreased to its lowest relative level in the 15-year period. Inequality was
lowest in 2004/05, suggesting a more equitable distribution of wealth and a smaller
poverty gap. If this information is marginally correct, one could arguably conclude that
income distribution has improved from 1990-2005. This data, compared with the survey
data, provides a general and approximate conceptualization of poverty in Egypt.
Poverty in Egypt
When discussing ultra poverty, extreme impoverishment, and absolute poor groups in a
society, one is talking about the highly marginalized, vulnerable, and high-risk social
groups. In Datt, Joliffe, and Sharma’s profile of poverty in Egypt, they note some of the
common characteristics of those living in severe impoverishment. They use per capita
consumption as a measure of individual welfare to reflect individual preferences
conditional on prices and incomes. They also incorporate regional differences, size and
age composition of households and nonfood consumption preferences for relatively poor
households to portray a comprehensive profile of the levels of poverty in Egypt.
Accordingly, in 1997, about 15.7 million or 26.5 percent of the population in Egypt was
classified as poor. Within this group of poor, 5.1 million were determined to be living in
absolute poverty or ultra poor. While the poverty gap index and headcount index did not
show the severity of poverty, the poverty-gap and squared-poverty-gap indexes are the
worst in the rural regions. However the Gini coefficient is worse in the urban areas.
Datt and Joliffe’s research in Egypt correlate with some demographic
generalizations in poverty indicators and comparisons. For example, some of the poorest
households have larger households and higher dependency ratios. These households have
members who are between the ages of 0-15 or over 60 and would not traditionally
contribute to the sustainability and management of a household. Instead they depend on
other members of the family for financial, economic, and social support. Extreme poor
household compositions typically are larger than poor households with an average 8
family members while poor households are around 5.4 members. Female-headed
households are also vulnerable and are at risk to live in absolute impoverishment. The
ultra poor have a much higher percentage of family members who do not complete
primary school. Most work as casual wage laborers; employment that is rarely consistent
and highly vulnerable to shocks. Absolute poverty is prevalent in rural areas, specifically
Upper Egypt. About seventy-four percent of the ultra poor population lives in rural areas.
Levels of Poverty, Impoverishment, and Deprivation
A comprehensive report on Egypt was issued as the Poverty Assessment Update in 2007,
which looks at the same survey time periods as El Laithy and Kheir El Din’s research.
The Ministry of Economic Development and the World Bank developed this study,
emphasizing the necessity for some kind of agreement on poverty measurement in Egypt.
The assessment conceded that, while no single method to accurately indicate or measure
poverty exists, it was important not to confine poverty within the framework of only
measuring limited income. In order to comprehensively measure the state of deprivation,
one should use the multiple dimensions of indicators and data into account.
The Poverty Assessment Update attempts to obtain a general consensus on poverty
measurement with statistical and analytical support from Ravallion, El Laithy, Lokshin,
and Banerji’s research, as well as prior research on the subject from the World Bank
archives. It claims self-accuracy by using local prices and poverty lines adjusted to
household demographics throughout the report.
This poverty assessment uses three primary aggregate measures to account for the
‘multidimensionality’ of poverty.69 First, the head count index measures the prevalence of
poverty determined by a poverty line. It shows the percentage of poor as a proportion of
the total population. However, this indicator does not reflect the dynamics of distribution
of the poor that exist below the poverty line, but simply paints a static picture of poor vs.
non-poor. Second, the poverty gap index calculates the depth and magnitude of poverty—
the gap between low-income expenditure levels and the poverty line. Lastly, the poverty
severity index measures the degree of inequality in the distribution below the poverty
line, giving a greater weight to households at the bottom of expenditure or income
distribution.
Instead of setting a standard income or consumption line which is often used in
research on this subject, the assessment classifies poverty into three groups: extreme,
absolute, and near poverty. These three groups combined constitute the poor. Each
category has its own poverty line and is assessed by comparing household consumption
by HIECS representative survey. In 2005 dollar values, one dollar purchasing power
parity (PPP) is the equivalent to 2.57 Egyptian pounds. Dollars with the same purchasing
power in the United States, when conflated with goods and services, are more expensive
in the US, one PPP dollar per day is equivalent of much less than a current exchange rate
would imply. Those classified as extremely poor are considered as individuals who spend
less than 995 Egyptian pounds (in 2005 PPP value) per year. Absolute poor is classified as
those spending less than 1,423 pounds per year. Those who are near poor spend between
1,424 and 1,854 pounds per year. One can expand on this approach by breaking the
estimated poverty lines even further to account for age, gender, region, and household
size.
While previous poverty measurements ignored the significant differences in
consumption patterns and prices across the region, the assessment uses a cost-of-
basicneeds methodology in order to establish subsistence minimums. For example, it is
crucial for accuracy to account for different requirements of different household
members, to take economies of scale within the household into account, as well as to
consider that non-food items can be shared among household members. The methodology
used in this report can account for the problems with previous poverty research in Egypt.
Accordingly, Egypt follows an absolute poverty line with a focus on those who are
deprived of the ‘most basic needs,’ rather than those who potentially face deprivation
relative to their fellow citizens. Using the PPP exchange rate as a set value for the 95/96,
99/00, and 04/05 surveys, two internationally standard poverty lines are used in this
report. This allows for a broader understanding of the circumstances of minimum living
standards, defined as 1$ a day, and those who are more prone or vulnerable to poverty
denoted by 2$ a day.
In combining this poverty line with total poverty line, the food poverty line is
supplemented by an allowance for expenditure for essential non-food goods. The price of
non-food expenses is estimated by identifying the share of non-food expenditure for
households whose total expenditure was equivalent to the food poverty line. Poverty rates
are based on comparisons between actual expenditure and the cost of a consumption
basket securing 2,470 calories per day per person, along with some additional basic
services.
This report thus concludes that approximately forty percent of the population in
Egypt is clustered between one and two dollars per capita a day. It also notes that in
examining the poverty trends from 1996-2005, the poverty rate was 19.4% in 1996,
16.7% in 2000, and 19.6% in 2005. This confirms El Laithy and Kheir El Din’s estimates.
The assessment further reports that those who faced extreme poverty were at 2% in 1996,
2.9% in 2000, and 3.8% in 2005. Those that were near poverty were at 32% in 1996,
25.9% in 2000, and 29.9 percent in 2005. The poverty gap index was 3.4% in 1996, 3.0%
in 2000, and 3.6% in 2005. The poverty severity index was at 2% in 1996, 2.9% in 2000,
and 3.8% in 2005. These conclusions represent the overall poverty profile of Egypt during
this time period.
Furthermore, one can expand on the differences between deprivation and severe
deprivation. For example, according to Gordon’s deprivation scale, if an individual has a
body mass index under 16, they are severely underweight and therefore represent the
element of severe deprivation. The scale moves up to a body mass index of 18.5, anything
below this threshold would represent deprivation. Using the BMI to calculate health and
nourishment is useful. While it does not take into account individual preference, nutrition,
or food baskets, it does provide a general idea of a person’s health by using their height
and weight and oftentimes, age and gender. Clearly, there are variations for standard or
optimal BMI and this measure has many limitations. However, because the cut off for
severe deprivation is staggered to a very low BMI number, it can be very practical when
used with other deprivation indicators.
His scale also elaborates on specific criteria to determine the standards of his
scale. Each one differentiates between deprivation and severe deprivation. Although his
criteria are useful for understanding general thresholds for deprivation and severe
deprivation, they ignore a crucial factor, the perception of poverty.
In perceiving poverty on any scale, the role of inequality cannot be ignored.
Inequality can intensify poverty, not only in terms of statistical facts, but in opinions of
circumstance as well. If an individual is living in deprivation, that deprivation can seem
exaggerated if his neighbor is living in luxury. Therefore, the perception of poverty
cannot be ignored when looking at levels of deprivation.
Within any given community, certain individuals may not perceive themselves as
poor at all, even though they might not have access to health or educational facilities or
they live in mud floor houses without modern sanitation. By most standards, this would
constitute an extreme level of poverty. But if most of the community lived within these
same sets of living or social circumstances, their own interpretation of poverty would be
limited to their direct experience. For example, if everyone in an indigenous tribe in
South America lived in mud huts and used the local river for sustenance, inequality does
not seem readily apparent. There is not a large discrepancy between the different groups
in the tribe (although power and politics within any society are bound to play a role).
However if a particular few of that group have access to other facilities or modern
technology, or are even aware that it exists regardless of their lifestyle, they may perceive
their situation as more unequal and more dire than otherwise
For example, indigenous populations in South America may not view themselves
as living in severe poverty although they could potentially fall under that category
according to Gordon’s eight criteria. Some of these groups use rivers and ponds instead of
modern plumbing. They have no access to healthcare; they live in houses with mud floors
or no floors at all; they share space with four or more people per room; they have no
access to newspapers, radios, computers, or other modern information sources. While
many of these things may be true for large groups of marginalized peoples in societies,
they do not automatically infer severe poverty. These criteria are largely based on a
modern Western version of deprivation and minimum living standards, enhanced by
inequalities in a society. You cannot be a “have not” if you are not exposed to certain
assets that would allow you to “have” something in the first place.
Vulnerability
There are certain freedoms, choices, and rights that limit a person in poverty.
Deprivation reflects vulnerability; the poor are often at risk in terms of health, education,
social stability, or ill treatment and abuse by society or the state. The vulnerability
dimension is usually due to events in which an individual has no control. For example,
violence, disease, economic shocks and natural disasters all reinforce a person’s attitude
towards his own perception of poverty. Vulnerability, in this aspect, “exacerbates material
poverty and weakens their bargaining position” of groups at risk. The poor often have no
voice, control, or representation in their personal development. Vulnerability represents
the risk a household has of falling into poverty. These groups often fall into poverty
clusters and are highly sensitive to shocks such as emergency medical expenses, lost jobs,
natural disasters, bad business profits, etc. Vulnerability can be mitigated through giving
at-risk groups of society empowerment and their opportunities and security. Vulnerability
is crucial in the experience and processes of poverty.
Interpretation and Perception of Poverty
Interpretations of poverty and poorness are subjective. What constitutes poverty to
one individual may be perceived differently to another. Different poverty thresholds can
be determined by subjective poverty lines, which depend on the personal judgment of an
individual or household’s standard of living. The benefit of this threshold is that it
identifies poverty measurement as an intrinsically deduced judgment by a person of what
is acceptable as minimum living standard. Subjective poverty is more dependent on
personal perception and considerations by the population that is being measured. For
example, if the inequality rate is high in a country, the bottom quadrant of the population
may not be living in actual poverty. This group may perceive their poverty based on
comparisons to those with better living standards. Subjective poverty is an important
measure, but it can be problematic as it is inherently subject to individual preferences of
basic needs. These preferences are dynamic and differ based on relative criteria, such as
individual taste, location, gender, occupation, and price variations.
The perception of poverty plays an important role in understanding
impoverishment. A person’s individual perception of his own poverty greatly influences
his level of deprivation. A government’s perception of poverty would obviously play an
enormous role in determining social and welfare policy.
Subjective factors such as interpretation, poverty measurement, or methods for
quantifying growth demonstrate how poverty measures are conditional on the perception
of one’s understanding of poverty. This can be demonstrated by the nature and scale of
poverty studies in Egypt. Poverty analysis in Egypt differs widely in magnitude,
distribution, and incidence, illustrated by the various conflicting representations of
poverty in Egypt among current scholarship and research. Even more interesting is that
the majority of work on poverty in Egypt stems from the exact same survey data produced
by the Central Agency for Public Mobilization and Statistics and the Egyptian
government. Yet, although the data from CAPMAS is the only officially available data on
poverty figures in Egypt, different institutions, economists, and social researchers have
put a subjective spin on the overall results, painting a confusing and rather incoherent
picture of poverty in Egypt. This conflict arises from the different methodologies and
poverty lines used to indicate social welfare. Frequently, it is merely a minor change in
percentages of poverty measurement indexes. However, in the broader situation, millions
of people might be ignored or incorrectly aggregated into an author’s subjective category
of poverty.
Poverty in the Egyptian Context:
Poverty Research and Methodologies in Egypt
When considering the effects of political policy, economic reform, and social funding
directed toward welfare and well being in developing countries, policy formation should
focus on the importance of objective poverty research and accountability.
Poverty analysis and scholarship in Egypt are gathered from many different
authorities; from institutions such as the World Bank or IFPRI, private researchers,
Egyptian economists or other political economy scientists researching poverty statistics.
Most of these reports use primary data from Household Income Expenditure and
Consumption Surveys (HIECS) conducted by CAPMAS, the official statistical agency in
Egypt. These surveys began in 1957 by the Egyptian government but were conducted on
an irregular basis in 1964/65, 1974/75, and 1981/982. It was not until 1990 that
CAPMAS began issuing the surveys every 5 years.
While these surveys are useful in understanding broad trends in poverty in Egypt,
they have significant limitations. First, nutritional and food related data is not readily
available. Second, the results and methods of calculating individual diets, which vary
between differing ages, sexes, occupation, and geography, are ambiguous, leading many
poverty researchers to use their own interpretive methodologies to calculate the
magnitude and dimensions of poverty. Third, the Institute of National Planning and
CAPMAS did not release their surveys in an individual household form nor did they
specify these differences and relative measurements. Furthermore, it is also unclear how
CAPMAS accounted for regional variations with food and non-food pricing, which would
clearly impact the construction of expenditure-based poverty lines. Finally, all of the
poverty lines utilized are based on consumer expenditure data, which does not account for
saving or borrowing from other sources.
As previously mentioned, the most consistent source of poverty analysis and
measurement comes from the Household, Income, Expenditure, and Consumption
Surveys for the years 1990/91, 1995/96, 1999/00, and 2004/05. These surveys were
administrated through CAPMAS using household specific poverty lines, including both a
standardized food and a nonfood poverty line. Economists Hanaa Kheir el Din and Heba
el-Laithy analyzed these surveys in conjunction with poverty-related data from the
Ministry of Economic Development, CAPMAS, and the World Bank databases. The data
is useful in observing patterns of growth and poverty in Egypt during this period.
1990 marks the initial period of consistent CAMPAS studies which were then
surveyed and issued every five years. According to the Poverty Assessment Update, these
surveys consist of large samples drawn from the whole country and contain data on
income/consumption and expenditures on over 600 items of goods and services. They
provide “a good source of information on the distribution of welfare within Egyptian
society.” Second, the continuity of data is important both for accuracy and consistency,
although during this period, there was limited methodical or empirical data available from
official sources. No nationally representative unit level data was available for public
usage from either government or private sources. Most of the scholars who analyze and
report poverty statistics on Egypt note this lack of formal or reliable data for poverty and
inequality.
According to El Laithy and Kheir El Din’s results, poverty—including measures
such as depth, severity, incidence, etc.—declined during the second half of the nineties.
This was an indirect result of the drastic GDP growth in 1994/95 compared to earlier
years, particularly with regard to extremely high incidences of poverty in Egypt
throughout the 1980’s. According to the author’s estimates and information from the
HIECS, the results were interpreted using poverty indicators that represented a person’s
ability to obtain basic food and nonfood needs. This was based on individual per capita
poverty lines and then measured and calculated using household poverty lines. The
incidence, depth, and severity of poverty were calculated by using aggregate poverty
measures from 1990 to 2005. According to this data, poverty fell from 24.18% of the
population in 1990/91 to 19.41% in 1995/96. It decreased further from 19.41% to 16.74%
in 1999/00. The poverty rate then increased from 16.74 to 19.56 percent in 2004/05. The
data also showed that both the depth and severity of poverty followed similar patterns.
Both measures decreased dramatically from 1990/91 to 1995/96, dropped further in
1999/00, and then increased in 2004/05.
In terms of household income inequality the gini coefficient (the measure of
inequality of wealth) decreased from 1990/91 to 1995/96 which indicated a better
distribution of wealth. From 1995/96 to 1999/00, the gini coefficient increased slightly
which demonstrated an increase of wealth inequality. However, from 1999/00 to 2004/05,
inequality decreased to its lowest relative level in the 15-year period. Inequality was
lowest in 2004/05, suggesting a more equitable distribution of wealth and a smaller
poverty gap. If this information is marginally correct, one could arguably conclude that
income distribution has improved from 1990-2005. This data, compared with the survey
data, provides a general and approximate conceptualization of poverty in Egypt.
Poverty in Egypt
When discussing ultra poverty, extreme impoverishment, and absolute poor groups in a
society, one is talking about the highly marginalized, vulnerable, and high-risk social
groups. In Datt, Joliffe, and Sharma’s profile of poverty in Egypt, they note some of the
common characteristics of those living in severe impoverishment. They use per capita
consumption as a measure of individual welfare to reflect individual preferences
conditional on prices and incomes. They also incorporate regional differences, size and
age composition of households and nonfood consumption preferences for relatively poor
households to portray a comprehensive profile of the levels of poverty in Egypt.
Accordingly, in 1997, about 15.7 million or 26.5 percent of the population in Egypt was
classified as poor. Within this group of poor, 5.1 million were determined to be living in
absolute poverty or ultra poor. While the poverty gap index and headcount index did not
show the severity of poverty, the poverty-gap and squared-poverty-gap indexes are the
worst in the rural regions. However the Gini coefficient is worse in the urban areas.
Datt and Joliffe’s research in Egypt correlate with some demographic
generalizations in poverty indicators and comparisons. For example, some of the poorest
households have larger households and higher dependency ratios. These households have
members who are between the ages of 0-15 or over 60 and would not traditionally
contribute to the sustainability and management of a household. Instead they depend on
other members of the family for financial, economic, and social support. Extreme poor
household compositions typically are larger than poor households with an average 8
family members while poor households are around 5.4 members. Female-headed
households are also vulnerable and are at risk to live in absolute impoverishment. The
ultra poor have a much higher percentage of family members who do not complete
primary school. Most work as casual wage laborers; employment that is rarely consistent
and highly vulnerable to shocks. Absolute poverty is prevalent in rural areas, specifically
Upper Egypt. About seventy-four percent of the ultra poor population lives in rural areas.
Levels of Poverty, Impoverishment, and Deprivation
A comprehensive report on Egypt was issued as the Poverty Assessment Update in 2007,
which looks at the same survey time periods as El Laithy and Kheir El Din’s research.
The Ministry of Economic Development and the World Bank developed this study,
emphasizing the necessity for some kind of agreement on poverty measurement in Egypt.
The assessment conceded that, while no single method to accurately indicate or measure
poverty exists, it was important not to confine poverty within the framework of only
measuring limited income. In order to comprehensively measure the state of deprivation,
one should use the multiple dimensions of indicators and data into account.
The Poverty Assessment Update attempts to obtain a general consensus on poverty
measurement with statistical and analytical support from Ravallion, El Laithy, Lokshin,
and Banerji’s research, as well as prior research on the subject from the World Bank
archives. It claims self-accuracy by using local prices and poverty lines adjusted to
household demographics throughout the report.
This poverty assessment uses three primary aggregate measures to account for the
‘multidimensionality’ of poverty.69 First, the head count index measures the prevalence of
poverty determined by a poverty line. It shows the percentage of poor as a proportion of
the total population. However, this indicator does not reflect the dynamics of distribution
of the poor that exist below the poverty line, but simply paints a static picture of poor vs.
non-poor. Second, the poverty gap index calculates the depth and magnitude of poverty—
the gap between low-income expenditure levels and the poverty line. Lastly, the poverty
severity index measures the degree of inequality in the distribution below the poverty
line, giving a greater weight to households at the bottom of expenditure or income
distribution.
Instead of setting a standard income or consumption line which is often used in
research on this subject, the assessment classifies poverty into three groups: extreme,
absolute, and near poverty. These three groups combined constitute the poor. Each
category has its own poverty line and is assessed by comparing household consumption
by HIECS representative survey. In 2005 dollar values, one dollar purchasing power
parity (PPP) is the equivalent to 2.57 Egyptian pounds. Dollars with the same purchasing
power in the United States, when conflated with goods and services, are more expensive
in the US, one PPP dollar per day is equivalent of much less than a current exchange rate
would imply. Those classified as extremely poor are considered as individuals who spend
less than 995 Egyptian pounds (in 2005 PPP value) per year. Absolute poor is classified as
those spending less than 1,423 pounds per year. Those who are near poor spend between
1,424 and 1,854 pounds per year. One can expand on this approach by breaking the
estimated poverty lines even further to account for age, gender, region, and household
size.
While previous poverty measurements ignored the significant differences in
consumption patterns and prices across the region, the assessment uses a cost-of-
basicneeds methodology in order to establish subsistence minimums. For example, it is
crucial for accuracy to account for different requirements of different household
members, to take economies of scale within the household into account, as well as to
consider that non-food items can be shared among household members. The methodology
used in this report can account for the problems with previous poverty research in Egypt.
Accordingly, Egypt follows an absolute poverty line with a focus on those who are
deprived of the ‘most basic needs,’ rather than those who potentially face deprivation
relative to their fellow citizens. Using the PPP exchange rate as a set value for the 95/96,
99/00, and 04/05 surveys, two internationally standard poverty lines are used in this
report. This allows for a broader understanding of the circumstances of minimum living
standards, defined as 1$ a day, and those who are more prone or vulnerable to poverty
denoted by 2$ a day.
In combining this poverty line with total poverty line, the food poverty line is
supplemented by an allowance for expenditure for essential non-food goods. The price of
non-food expenses is estimated by identifying the share of non-food expenditure for
households whose total expenditure was equivalent to the food poverty line. Poverty rates
are based on comparisons between actual expenditure and the cost of a consumption
basket securing 2,470 calories per day per person, along with some additional basic
services.
This report thus concludes that approximately forty percent of the population in
Egypt is clustered between one and two dollars per capita a day. It also notes that in
examining the poverty trends from 1996-2005, the poverty rate was 19.4% in 1996,
16.7% in 2000, and 19.6% in 2005. This confirms El Laithy and Kheir El Din’s estimates.
The assessment further reports that those who faced extreme poverty were at 2% in 1996,
2.9% in 2000, and 3.8% in 2005. Those that were near poverty were at 32% in 1996,
25.9% in 2000, and 29.9 percent in 2005. The poverty gap index was 3.4% in 1996, 3.0%
in 2000, and 3.6% in 2005. The poverty severity index was at 2% in 1996, 2.9% in 2000,
and 3.8% in 2005. These conclusions represent the overall poverty profile of Egypt during
this time period.
Furthermore, one can expand on the differences between deprivation and severe
deprivation. For example, according to Gordon’s deprivation scale, if an individual has a
body mass index under 16, they are severely underweight and therefore represent the
element of severe deprivation. The scale moves up to a body mass index of 18.5, anything
below this threshold would represent deprivation. Using the BMI to calculate health and
nourishment is useful. While it does not take into account individual preference, nutrition,
or food baskets, it does provide a general idea of a person’s health by using their height
and weight and oftentimes, age and gender. Clearly, there are variations for standard or
optimal BMI and this measure has many limitations. However, because the cut off for
severe deprivation is staggered to a very low BMI number, it can be very practical when
used with other deprivation indicators.
His scale also elaborates on specific criteria to determine the standards of his
scale. Each one differentiates between deprivation and severe deprivation. Although his
criteria are useful for understanding general thresholds for deprivation and severe
deprivation, they ignore a crucial factor, the perception of poverty.
In perceiving poverty on any scale, the role of inequality cannot be ignored.
Inequality can intensify poverty, not only in terms of statistical facts, but in opinions of
circumstance as well. If an individual is living in deprivation, that deprivation can seem
exaggerated if his neighbor is living in luxury. Therefore, the perception of poverty
cannot be ignored when looking at levels of deprivation.
Within any given community, certain individuals may not perceive themselves as
poor at all, even though they might not have access to health or educational facilities or
they live in mud floor houses without modern sanitation. By most standards, this would
constitute an extreme level of poverty. But if most of the community lived within these
same sets of living or social circumstances, their own interpretation of poverty would be
limited to their direct experience. For example, if everyone in an indigenous tribe in
South America lived in mud huts and used the local river for sustenance, inequality does
not seem readily apparent. There is not a large discrepancy between the different groups
in the tribe (although power and politics within any society are bound to play a role).
However if a particular few of that group have access to other facilities or modern
technology, or are even aware that it exists regardless of their lifestyle, they may perceive
their situation as more unequal and more dire than otherwise
For example, indigenous populations in South America may not view themselves
as living in severe poverty although they could potentially fall under that category
according to Gordon’s eight criteria. Some of these groups use rivers and ponds instead of
modern plumbing. They have no access to healthcare; they live in houses with mud floors
or no floors at all; they share space with four or more people per room; they have no
access to newspapers, radios, computers, or other modern information sources. While
many of these things may be true for large groups of marginalized peoples in societies,
they do not automatically infer severe poverty. These criteria are largely based on a
modern Western version of deprivation and minimum living standards, enhanced by
inequalities in a society. You cannot be a “have not” if you are not exposed to certain
assets that would allow you to “have” something in the first place.
Vulnerability
There are certain freedoms, choices, and rights that limit a person in poverty.
Deprivation reflects vulnerability; the poor are often at risk in terms of health, education,
social stability, or ill treatment and abuse by society or the state. The vulnerability
dimension is usually due to events in which an individual has no control. For example,
violence, disease, economic shocks and natural disasters all reinforce a person’s attitude
towards his own perception of poverty. Vulnerability, in this aspect, “exacerbates material
poverty and weakens their bargaining position” of groups at risk. The poor often have no
voice, control, or representation in their personal development. Vulnerability represents
the risk a household has of falling into poverty. These groups often fall into poverty
clusters and are highly sensitive to shocks such as emergency medical expenses, lost jobs,
natural disasters, bad business profits, etc. Vulnerability can be mitigated through giving
at-risk groups of society empowerment and their opportunities and security. Vulnerability
is crucial in the experience and processes of poverty.
Interpretation and Perception of Poverty
Interpretations of poverty and poorness are subjective. What constitutes poverty to
one individual may be perceived differently to another. Different poverty thresholds can
be determined by subjective poverty lines, which depend on the personal judgment of an
individual or household’s standard of living. The benefit of this threshold is that it
identifies poverty measurement as an intrinsically deduced judgment by a person of what
is acceptable as minimum living standard. Subjective poverty is more dependent on
personal perception and considerations by the population that is being measured. For
example, if the inequality rate is high in a country, the bottom quadrant of the population
may not be living in actual poverty. This group may perceive their poverty based on
comparisons to those with better living standards. Subjective poverty is an important
measure, but it can be problematic as it is inherently subject to individual preferences of
basic needs. These preferences are dynamic and differ based on relative criteria, such as
individual taste, location, gender, occupation, and price variations.
The perception of poverty plays an important role in understanding
impoverishment. A person’s individual perception of his own poverty greatly influences
his level of deprivation. A government’s perception of poverty would obviously play an
enormous role in determining social and welfare policy.
Subjective factors such as interpretation, poverty measurement, or methods for
quantifying growth demonstrate how poverty measures are conditional on the perception
of one’s understanding of poverty. This can be demonstrated by the nature and scale of
poverty studies in Egypt. Poverty analysis in Egypt differs widely in magnitude,
distribution, and incidence, illustrated by the various conflicting representations of
poverty in Egypt among current scholarship and research. Even more interesting is that
the majority of work on poverty in Egypt stems from the exact same survey data produced
by the Central Agency for Public Mobilization and Statistics and the Egyptian
government. Yet, although the data from CAPMAS is the only officially available data on
poverty figures in Egypt, different institutions, economists, and social researchers have
put a subjective spin on the overall results, painting a confusing and rather incoherent
picture of poverty in Egypt. This conflict arises from the different methodologies and
poverty lines used to indicate social welfare. Frequently, it is merely a minor change in
percentages of poverty measurement indexes. However, in the broader situation, millions
of people might be ignored or incorrectly aggregated into an author’s subjective category
of poverty.
Poverty in the Egyptian Context:
Poverty Research and Methodologies in Egypt
When considering the effects of political policy, economic reform, and social funding
directed toward welfare and well being in developing countries, policy formation should
focus on the importance of objective poverty research and accountability.
Poverty analysis and scholarship in Egypt are gathered from many different
authorities; from institutions such as the World Bank or IFPRI, private researchers,
Egyptian economists or other political economy scientists researching poverty statistics.
Most of these reports use primary data from Household Income Expenditure and
Consumption Surveys (HIECS) conducted by CAPMAS, the official statistical agency in
Egypt. These surveys began in 1957 by the Egyptian government but were conducted on
an irregular basis in 1964/65, 1974/75, and 1981/982. It was not until 1990 that
CAPMAS began issuing the surveys every 5 years.
While these surveys are useful in understanding broad trends in poverty in Egypt,
they have significant limitations. First, nutritional and food related data is not readily
available. Second, the results and methods of calculating individual diets, which vary
between differing ages, sexes, occupation, and geography, are ambiguous, leading many
poverty researchers to use their own interpretive methodologies to calculate the
magnitude and dimensions of poverty. Third, the Institute of National Planning and
CAPMAS did not release their surveys in an individual household form nor did they
specify these differences and relative measurements. Furthermore, it is also unclear how
CAPMAS accounted for regional variations with food and non-food pricing, which would
clearly impact the construction of expenditure-based poverty lines. Finally, all of the
poverty lines utilized are based on consumer expenditure data, which does not account for
saving or borrowing from other sources.
As previously mentioned, the most consistent source of poverty analysis and
measurement comes from the Household, Income, Expenditure, and Consumption
Surveys for the years 1990/91, 1995/96, 1999/00, and 2004/05. These surveys were
administrated through CAPMAS using household specific poverty lines, including both a
standardized food and a nonfood poverty line. Economists Hanaa Kheir el Din and Heba
el-Laithy analyzed these surveys in conjunction with poverty-related data from the
Ministry of Economic Development, CAPMAS, and the World Bank databases. The data
is useful in observing patterns of growth and poverty in Egypt during this period.
1990 marks the initial period of consistent CAMPAS studies which were then
surveyed and issued every five years. According to the Poverty Assessment Update, these
surveys consist of large samples drawn from the whole country and contain data on
income/consumption and expenditures on over 600 items of goods and services. They
provide “a good source of information on the distribution of welfare within Egyptian
society.” Second, the continuity of data is important both for accuracy and consistency,
although during this period, there was limited methodical or empirical data available from
official sources. No nationally representative unit level data was available for public
usage from either government or private sources. Most of the scholars who analyze and
report poverty statistics on Egypt note this lack of formal or reliable data for poverty and
inequality.
According to El Laithy and Kheir El Din’s results, poverty—including measures
such as depth, severity, incidence, etc.—declined during the second half of the nineties.
This was an indirect result of the drastic GDP growth in 1994/95 compared to earlier
years, particularly with regard to extremely high incidences of poverty in Egypt
throughout the 1980’s. According to the author’s estimates and information from the
HIECS, the results were interpreted using poverty indicators that represented a person’s
ability to obtain basic food and nonfood needs. This was based on individual per capita
poverty lines and then measured and calculated using household poverty lines. The
incidence, depth, and severity of poverty were calculated by using aggregate poverty
measures from 1990 to 2005. According to this data, poverty fell from 24.18% of the
population in 1990/91 to 19.41% in 1995/96. It decreased further from 19.41% to 16.74%
in 1999/00. The poverty rate then increased from 16.74 to 19.56 percent in 2004/05. The
data also showed that both the depth and severity of poverty followed similar patterns.
Both measures decreased dramatically from 1990/91 to 1995/96, dropped further in
1999/00, and then increased in 2004/05.
In terms of household income inequality the gini coefficient (the measure of
inequality of wealth) decreased from 1990/91 to 1995/96 which indicated a better
distribution of wealth. From 1995/96 to 1999/00, the gini coefficient increased slightly
which demonstrated an increase of wealth inequality. However, from 1999/00 to 2004/05,
inequality decreased to its lowest relative level in the 15-year period. Inequality was
lowest in 2004/05, suggesting a more equitable distribution of wealth and a smaller
poverty gap. If this information is marginally correct, one could arguably conclude that
income distribution has improved from 1990-2005. This data, compared with the survey
data, provides a general and approximate conceptualization of poverty in Egypt.
Poverty in Egypt
When discussing ultra poverty, extreme impoverishment, and absolute poor groups in a
society, one is talking about the highly marginalized, vulnerable, and high-risk social
groups. In Datt, Joliffe, and Sharma’s profile of poverty in Egypt, they note some of the
common characteristics of those living in severe impoverishment. They use per capita
consumption as a measure of individual welfare to reflect individual preferences
conditional on prices and incomes. They also incorporate regional differences, size and
age composition of households and nonfood consumption preferences for relatively poor
households to portray a comprehensive profile of the levels of poverty in Egypt.
Accordingly, in 1997, about 15.7 million or 26.5 percent of the population in Egypt was
classified as poor. Within this group of poor, 5.1 million were determined to be living in
absolute poverty or ultra poor. While the poverty gap index and headcount index did not
show the severity of poverty, the poverty-gap and squared-poverty-gap indexes are the
worst in the rural regions. However the Gini coefficient is worse in the urban areas.
Datt and Joliffe’s research in Egypt correlate with some demographic
generalizations in poverty indicators and comparisons. For example, some of the poorest
households have larger households and higher dependency ratios. These households have
members who are between the ages of 0-15 or over 60 and would not traditionally
contribute to the sustainability and management of a household. Instead they depend on
other members of the family for financial, economic, and social support. Extreme poor
household compositions typically are larger than poor households with an average 8
family members while poor households are around 5.4 members. Female-headed
households are also vulnerable and are at risk to live in absolute impoverishment. The
ultra poor have a much higher percentage of family members who do not complete
primary school. Most work as casual wage laborers; employment that is rarely consistent
and highly vulnerable to shocks. Absolute poverty is prevalent in rural areas, specifically
Upper Egypt. About seventy-four percent of the ultra poor population lives in rural areas.
Levels of Poverty, Impoverishment, and Deprivation
A comprehensive report on Egypt was issued as the Poverty Assessment Update in 2007,
which looks at the same survey time periods as El Laithy and Kheir El Din’s research.
The Ministry of Economic Development and the World Bank developed this study,
emphasizing the necessity for some kind of agreement on poverty measurement in Egypt.
The assessment conceded that, while no single method to accurately indicate or measure
poverty exists, it was important not to confine poverty within the framework of only
measuring limited income. In order to comprehensively measure the state of deprivation,
one should use the multiple dimensions of indicators and data into account.
The Poverty Assessment Update attempts to obtain a general consensus on poverty
measurement with statistical and analytical support from Ravallion, El Laithy, Lokshin,
and Banerji’s research, as well as prior research on the subject from the World Bank
archives. It claims self-accuracy by using local prices and poverty lines adjusted to
household demographics throughout the report.
This poverty assessment uses three primary aggregate measures to account for the
‘multidimensionality’ of poverty.69 First, the head count index measures the prevalence of
poverty determined by a poverty line. It shows the percentage of poor as a proportion of
the total population. However, this indicator does not reflect the dynamics of distribution
of the poor that exist below the poverty line, but simply paints a static picture of poor vs.
non-poor. Second, the poverty gap index calculates the depth and magnitude of poverty—
the gap between low-income expenditure levels and the poverty line. Lastly, the poverty
severity index measures the degree of inequality in the distribution below the poverty
line, giving a greater weight to households at the bottom of expenditure or income
distribution.
Instead of setting a standard income or consumption line which is often used in
research on this subject, the assessment classifies poverty into three groups: extreme,
absolute, and near poverty. These three groups combined constitute the poor. Each
category has its own poverty line and is assessed by comparing household consumption
by HIECS representative survey. In 2005 dollar values, one dollar purchasing power
parity (PPP) is the equivalent to 2.57 Egyptian pounds. Dollars with the same purchasing
power in the United States, when conflated with goods and services, are more expensive
in the US, one PPP dollar per day is equivalent of much less than a current exchange rate
would imply. Those classified as extremely poor are considered as individuals who spend
less than 995 Egyptian pounds (in 2005 PPP value) per year. Absolute poor is classified as
those spending less than 1,423 pounds per year. Those who are near poor spend between
1,424 and 1,854 pounds per year. One can expand on this approach by breaking the
estimated poverty lines even further to account for age, gender, region, and household
size.
While previous poverty measurements ignored the significant differences in
consumption patterns and prices across the region, the assessment uses a cost-of-
basicneeds methodology in order to establish subsistence minimums. For example, it is
crucial for accuracy to account for different requirements of different household
members, to take economies of scale within the household into account, as well as to
consider that non-food items can be shared among household members. The methodology
used in this report can account for the problems with previous poverty research in Egypt.
Accordingly, Egypt follows an absolute poverty line with a focus on those who are
deprived of the ‘most basic needs,’ rather than those who potentially face deprivation
relative to their fellow citizens. Using the PPP exchange rate as a set value for the 95/96,
99/00, and 04/05 surveys, two internationally standard poverty lines are used in this
report. This allows for a broader understanding of the circumstances of minimum living
standards, defined as 1$ a day, and those who are more prone or vulnerable to poverty
denoted by 2$ a day.
In combining this poverty line with total poverty line, the food poverty line is
supplemented by an allowance for expenditure for essential non-food goods. The price of
non-food expenses is estimated by identifying the share of non-food expenditure for
households whose total expenditure was equivalent to the food poverty line. Poverty rates
are based on comparisons between actual expenditure and the cost of a consumption
basket securing 2,470 calories per day per person, along with some additional basic
services.
This report thus concludes that approximately forty percent of the population in
Egypt is clustered between one and two dollars per capita a day. It also notes that in
examining the poverty trends from 1996-2005, the poverty rate was 19.4% in 1996,
16.7% in 2000, and 19.6% in 2005. This confirms El Laithy and Kheir El Din’s estimates.
The assessment further reports that those who faced extreme poverty were at 2% in 1996,
2.9% in 2000, and 3.8% in 2005. Those that were near poverty were at 32% in 1996,
25.9% in 2000, and 29.9 percent in 2005. The poverty gap index was 3.4% in 1996, 3.0%
in 2000, and 3.6% in 2005. The poverty severity index was at 2% in 1996, 2.9% in 2000,
and 3.8% in 2005. These conclusions represent the overall poverty profile of Egypt during
this time period.
Furthermore, one can expand on the differences between deprivation and severe
deprivation. For example, according to Gordon’s deprivation scale, if an individual has a
body mass index under 16, they are severely underweight and therefore represent the
element of severe deprivation. The scale moves up to a body mass index of 18.5, anything
below this threshold would represent deprivation. Using the BMI to calculate health and
nourishment is useful. While it does not take into account individual preference, nutrition,
or food baskets, it does provide a general idea of a person’s health by using their height
and weight and oftentimes, age and gender. Clearly, there are variations for standard or
optimal BMI and this measure has many limitations. However, because the cut off for
severe deprivation is staggered to a very low BMI number, it can be very practical when
used with other deprivation indicators.
His scale also elaborates on specific criteria to determine the standards of his
scale. Each one differentiates between deprivation and severe deprivation. Although his
criteria are useful for understanding general thresholds for deprivation and severe
deprivation, they ignore a crucial factor, the perception of poverty.
In perceiving poverty on any scale, the role of inequality cannot be ignored.
Inequality can intensify poverty, not only in terms of statistical facts, but in opinions of
circumstance as well. If an individual is living in deprivation, that deprivation can seem
exaggerated if his neighbor is living in luxury. Therefore, the perception of poverty
cannot be ignored when looking at levels of deprivation.
Within any given community, certain individuals may not perceive themselves as
poor at all, even though they might not have access to health or educational facilities or
they live in mud floor houses without modern sanitation. By most standards, this would
constitute an extreme level of poverty. But if most of the community lived within these
same sets of living or social circumstances, their own interpretation of poverty would be
limited to their direct experience. For example, if everyone in an indigenous tribe in
South America lived in mud huts and used the local river for sustenance, inequality does
not seem readily apparent. There is not a large discrepancy between the different groups
in the tribe (although power and politics within any society are bound to play a role).
However if a particular few of that group have access to other facilities or modern
technology, or are even aware that it exists regardless of their lifestyle, they may perceive
their situation as more unequal and more dire than otherwise
For example, indigenous populations in South America may not view themselves
as living in severe poverty although they could potentially fall under that category
according to Gordon’s eight criteria. Some of these groups use rivers and ponds instead of
modern plumbing. They have no access to healthcare; they live in houses with mud floors
or no floors at all; they share space with four or more people per room; they have no
access to newspapers, radios, computers, or other modern information sources. While
many of these things may be true for large groups of marginalized peoples in societies,
they do not automatically infer severe poverty. These criteria are largely based on a
modern Western version of deprivation and minimum living standards, enhanced by
inequalities in a society. You cannot be a “have not” if you are not exposed to certain
assets that would allow you to “have” something in the first place.
Vulnerability
There are certain freedoms, choices, and rights that limit a person in poverty.
Deprivation reflects vulnerability; the poor are often at risk in terms of health, education,
social stability, or ill treatment and abuse by society or the state. The vulnerability
dimension is usually due to events in which an individual has no control. For example,
violence, disease, economic shocks and natural disasters all reinforce a person’s attitude
towards his own perception of poverty. Vulnerability, in this aspect, “exacerbates material
poverty and weakens their bargaining position” of groups at risk. The poor often have no
voice, control, or representation in their personal development. Vulnerability represents
the risk a household has of falling into poverty. These groups often fall into poverty
clusters and are highly sensitive to shocks such as emergency medical expenses, lost jobs,
natural disasters, bad business profits, etc. Vulnerability can be mitigated through giving
at-risk groups of society empowerment and their opportunities and security. Vulnerability
is crucial in the experience and processes of poverty.
Interpretation and Perception of Poverty
Interpretations of poverty and poorness are subjective. What constitutes poverty to
one individual may be perceived differently to another. Different poverty thresholds can
be determined by subjective poverty lines, which depend on the personal judgment of an
individual or household’s standard of living. The benefit of this threshold is that it
identifies poverty measurement as an intrinsically deduced judgment by a person of what
is acceptable as minimum living standard. Subjective poverty is more dependent on
personal perception and considerations by the population that is being measured. For
example, if the inequality rate is high in a country, the bottom quadrant of the population
may not be living in actual poverty. This group may perceive their poverty based on
comparisons to those with better living standards. Subjective poverty is an important
measure, but it can be problematic as it is inherently subject to individual preferences of
basic needs. These preferences are dynamic and differ based on relative criteria, such as
individual taste, location, gender, occupation, and price variations.
The perception of poverty plays an important role in understanding
impoverishment. A person’s individual perception of his own poverty greatly influences
his level of deprivation. A government’s perception of poverty would obviously play an
enormous role in determining social and welfare policy.
Subjective factors such as interpretation, poverty measurement, or methods for
quantifying growth demonstrate how poverty measures are conditional on the perception
of one’s understanding of poverty. This can be demonstrated by the nature and scale of
poverty studies in Egypt. Poverty analysis in Egypt differs widely in magnitude,
distribution, and incidence, illustrated by the various conflicting representations of
poverty in Egypt among current scholarship and research. Even more interesting is that
the majority of work on poverty in Egypt stems from the exact same survey data produced
by the Central Agency for Public Mobilization and Statistics and the Egyptian
government. Yet, although the data from CAPMAS is the only officially available data on
poverty figures in Egypt, different institutions, economists, and social researchers have
put a subjective spin on the overall results, painting a confusing and rather incoherent
picture of poverty in Egypt. This conflict arises from the different methodologies and
poverty lines used to indicate social welfare. Frequently, it is merely a minor change in
percentages of poverty measurement indexes. However, in the broader situation, millions
of people might be ignored or incorrectly aggregated into an author’s subjective category
of poverty.
Poverty in the Egyptian Context:
Poverty Research and Methodologies in Egypt
When considering the effects of political policy, economic reform, and social funding
directed toward welfare and well being in developing countries, policy formation should
focus on the importance of objective poverty research and accountability.
Poverty analysis and scholarship in Egypt are gathered from many different
authorities; from institutions such as the World Bank or IFPRI, private researchers,
Egyptian economists or other political economy scientists researching poverty statistics.
Most of these reports use primary data from Household Income Expenditure and
Consumption Surveys (HIECS) conducted by CAPMAS, the official statistical agency in
Egypt. These surveys began in 1957 by the Egyptian government but were conducted on
an irregular basis in 1964/65, 1974/75, and 1981/982. It was not until 1990 that
CAPMAS began issuing the surveys every 5 years.
While these surveys are useful in understanding broad trends in poverty in Egypt,
they have significant limitations. First, nutritional and food related data is not readily
available. Second, the results and methods of calculating individual diets, which vary
between differing ages, sexes, occupation, and geography, are ambiguous, leading many
poverty researchers to use their own interpretive methodologies to calculate the
magnitude and dimensions of poverty. Third, the Institute of National Planning and
CAPMAS did not release their surveys in an individual household form nor did they
specify these differences and relative measurements. Furthermore, it is also unclear how
CAPMAS accounted for regional variations with food and non-food pricing, which would
clearly impact the construction of expenditure-based poverty lines. Finally, all of the
poverty lines utilized are based on consumer expenditure data, which does not account for
saving or borrowing from other sources.
As previously mentioned, the most consistent source of poverty analysis and
measurement comes from the Household, Income, Expenditure, and Consumption
Surveys for the years 1990/91, 1995/96, 1999/00, and 2004/05. These surveys were
administrated through CAPMAS using household specific poverty lines, including both a
standardized food and a nonfood poverty line. Economists Hanaa Kheir el Din and Heba
el-Laithy analyzed these surveys in conjunction with poverty-related data from the
Ministry of Economic Development, CAPMAS, and the World Bank databases. The data
is useful in observing patterns of growth and poverty in Egypt during this period.
1990 marks the initial period of consistent CAMPAS studies which were then
surveyed and issued every five years. According to the Poverty Assessment Update, these
surveys consist of large samples drawn from the whole country and contain data on
income/consumption and expenditures on over 600 items of goods and services. They
provide “a good source of information on the distribution of welfare within Egyptian
society.” Second, the continuity of data is important both for accuracy and consistency,
although during this period, there was limited methodical or empirical data available from
official sources. No nationally representative unit level data was available for public
usage from either government or private sources. Most of the scholars who analyze and
report poverty statistics on Egypt note this lack of formal or reliable data for poverty and
inequality.
According to El Laithy and Kheir El Din’s results, poverty—including measures
such as depth, severity, incidence, etc.—declined during the second half of the nineties.
This was an indirect result of the drastic GDP growth in 1994/95 compared to earlier
years, particularly with regard to extremely high incidences of poverty in Egypt
throughout the 1980’s. According to the author’s estimates and information from the
HIECS, the results were interpreted using poverty indicators that represented a person’s
ability to obtain basic food and nonfood needs. This was based on individual per capita
poverty lines and then measured and calculated using household poverty lines. The
incidence, depth, and severity of poverty were calculated by using aggregate poverty
measures from 1990 to 2005. According to this data, poverty fell from 24.18% of the
population in 1990/91 to 19.41% in 1995/96. It decreased further from 19.41% to 16.74%
in 1999/00. The poverty rate then increased from 16.74 to 19.56 percent in 2004/05. The
data also showed that both the depth and severity of poverty followed similar patterns.
Both measures decreased dramatically from 1990/91 to 1995/96, dropped further in
1999/00, and then increased in 2004/05.
In terms of household income inequality the gini coefficient (the measure of
inequality of wealth) decreased from 1990/91 to 1995/96 which indicated a better
distribution of wealth. From 1995/96 to 1999/00, the gini coefficient increased slightly
which demonstrated an increase of wealth inequality. However, from 1999/00 to 2004/05,
inequality decreased to its lowest relative level in the 15-year period. Inequality was
lowest in 2004/05, suggesting a more equitable distribution of wealth and a smaller
poverty gap. If this information is marginally correct, one could arguably conclude that
income distribution has improved from 1990-2005. This data, compared with the survey
data, provides a general and approximate conceptualization of poverty in Egypt.
Poverty in Egypt
When discussing ultra poverty, extreme impoverishment, and absolute poor groups in a
society, one is talking about the highly marginalized, vulnerable, and high-risk social
groups. In Datt, Joliffe, and Sharma’s profile of poverty in Egypt, they note some of the
common characteristics of those living in severe impoverishment. They use per capita
consumption as a measure of individual welfare to reflect individual preferences
conditional on prices and incomes. They also incorporate regional differences, size and
age composition of households and nonfood consumption preferences for relatively poor
households to portray a comprehensive profile of the levels of poverty in Egypt.
Accordingly, in 1997, about 15.7 million or 26.5 percent of the population in Egypt was
classified as poor. Within this group of poor, 5.1 million were determined to be living in
absolute poverty or ultra poor. While the poverty gap index and headcount index did not
show the severity of poverty, the poverty-gap and squared-poverty-gap indexes are the
worst in the rural regions. However the Gini coefficient is worse in the urban areas.
Datt and Joliffe’s research in Egypt correlate with some demographic
generalizations in poverty indicators and comparisons. For example, some of the poorest
households have larger households and higher dependency ratios. These households have
members who are between the ages of 0-15 or over 60 and would not traditionally
contribute to the sustainability and management of a household. Instead they depend on
other members of the family for financial, economic, and social support. Extreme poor
household compositions typically are larger than poor households with an average 8
family members while poor households are around 5.4 members. Female-headed
households are also vulnerable and are at risk to live in absolute impoverishment. The
ultra poor have a much higher percentage of family members who do not complete
primary school. Most work as casual wage laborers; employment that is rarely consistent
and highly vulnerable to shocks. Absolute poverty is prevalent in rural areas, specifically
Upper Egypt. About seventy-four percent of the ultra poor population lives in rural areas.
Levels of Poverty, Impoverishment, and Deprivation
A comprehensive report on Egypt was issued as the Poverty Assessment Update in 2007,
which looks at the same survey time periods as El Laithy and Kheir El Din’s research.
The Ministry of Economic Development and the World Bank developed this study,
emphasizing the necessity for some kind of agreement on poverty measurement in Egypt.
The assessment conceded that, while no single method to accurately indicate or measure
poverty exists, it was important not to confine poverty within the framework of only
measuring limited income. In order to comprehensively measure the state of deprivation,
one should use the multiple dimensions of indicators and data into account.
The Poverty Assessment Update attempts to obtain a general consensus on poverty
measurement with statistical and analytical support from Ravallion, El Laithy, Lokshin,
and Banerji’s research, as well as prior research on the subject from the World Bank
archives. It claims self-accuracy by using local prices and poverty lines adjusted to
household demographics throughout the report.
This poverty assessment uses three primary aggregate measures to account for the
‘multidimensionality’ of poverty.69 First, the head count index measures the prevalence of
poverty determined by a poverty line. It shows the percentage of poor as a proportion of
the total population. However, this indicator does not reflect the dynamics of distribution
of the poor that exist below the poverty line, but simply paints a static picture of poor vs.
non-poor. Second, the poverty gap index calculates the depth and magnitude of poverty—
the gap between low-income expenditure levels and the poverty line. Lastly, the poverty
severity index measures the degree of inequality in the distribution below the poverty
line, giving a greater weight to households at the bottom of expenditure or income
distribution.
Instead of setting a standard income or consumption line which is often used in
research on this subject, the assessment classifies poverty into three groups: extreme,
absolute, and near poverty. These three groups combined constitute the poor. Each
category has its own poverty line and is assessed by comparing household consumption
by HIECS representative survey. In 2005 dollar values, one dollar purchasing power
parity (PPP) is the equivalent to 2.57 Egyptian pounds. Dollars with the same purchasing
power in the United States, when conflated with goods and services, are more expensive
in the US, one PPP dollar per day is equivalent of much less than a current exchange rate
would imply. Those classified as extremely poor are considered as individuals who spend
less than 995 Egyptian pounds (in 2005 PPP value) per year. Absolute poor is classified as
those spending less than 1,423 pounds per year. Those who are near poor spend between
1,424 and 1,854 pounds per year. One can expand on this approach by breaking the
estimated poverty lines even further to account for age, gender, region, and household
size.
While previous poverty measurements ignored the significant differences in
consumption patterns and prices across the region, the assessment uses a cost-of-
basicneeds methodology in order to establish subsistence minimums. For example, it is
crucial for accuracy to account for different requirements of different household
members, to take economies of scale within the household into account, as well as to
consider that non-food items can be shared among household members. The methodology
used in this report can account for the problems with previous poverty research in Egypt.
Accordingly, Egypt follows an absolute poverty line with a focus on those who are
deprived of the ‘most basic needs,’ rather than those who potentially face deprivation
relative to their fellow citizens. Using the PPP exchange rate as a set value for the 95/96,
99/00, and 04/05 surveys, two internationally standard poverty lines are used in this
report. This allows for a broader understanding of the circumstances of minimum living
standards, defined as 1$ a day, and those who are more prone or vulnerable to poverty
denoted by 2$ a day.
In combining this poverty line with total poverty line, the food poverty line is
supplemented by an allowance for expenditure for essential non-food goods. The price of
non-food expenses is estimated by identifying the share of non-food expenditure for
households whose total expenditure was equivalent to the food poverty line. Poverty rates
are based on comparisons between actual expenditure and the cost of a consumption
basket securing 2,470 calories per day per person, along with some additional basic
services.
This report thus concludes that approximately forty percent of the population in
Egypt is clustered between one and two dollars per capita a day. It also notes that in
examining the poverty trends from 1996-2005, the poverty rate was 19.4% in 1996,
16.7% in 2000, and 19.6% in 2005. This confirms El Laithy and Kheir El Din’s estimates.
The assessment further reports that those who faced extreme poverty were at 2% in 1996,
2.9% in 2000, and 3.8% in 2005. Those that were near poverty were at 32% in 1996,
25.9% in 2000, and 29.9 percent in 2005. The poverty gap index was 3.4% in 1996, 3.0%
in 2000, and 3.6% in 2005. The poverty severity index was at 2% in 1996, 2.9% in 2000,
and 3.8% in 2005. These conclusions represent the overall poverty profile of Egypt during
this time period.
