A socioeconomic index, also known as a deprivation or poverty index, is a single numerical figure derived from multiple indicators, that gauges the socioeconomic status of a predefined area. It allows for direct comparisons of socioeconomic status between regions and is tremendously useful in identifying patterns and correlations between socioeconomic status and other attributes. However, it is not easy to construct as there are many indicators to choose from – income, expenditure, education, occupation, durable assets, etc. and it is difficult to objectively justify their relative importance. Several governments and organisations have developed socioeconomic indices for their respective regions that have been widely accepted as official: The National Statistics Socio-Economic Classification (NS-SEC) for the United Kingdom The European Deprivation Index (EDI) for Europe The Socio-Economic Indexes for Areas (SEIFA) for Australia The New Zealand Deprivation Index (NZDep) for New Zealand The Global Multidimensional Poverty Index (MPI) Unfortunately, Sri Lanka does not yet have such an index.
The government of Sri Lanka has increased spending on the leading welfare scheme Samurdhi, from LKR 15 billion in 2014, to LKR 43 billion in 2016, almost a tripling. There are 1.4 million beneficiaries, classified into those can be graduated out of the scheme, those who cannot, and those in between. Apparently, another 1 million people are clamoring to be included in the scheme. In this seven-minute speech made in a Parliament recently, Dr Harsha de Silva provides a quick comparison of the three principal methods of ascertaining poverty.
Some people are surprised that after all these years of speaking, responding, discussing, I still prepare when asked to speak in public. So when I was asked to serve as a discussant at a CEPA conference on infrastructure and urbanization, I read the papers. They had very little to do with the subject matter, choosing instead to regurgitate the obsolete ideological debates of the 1970s. But one sentence caught my eye: “After seven decades of national development and an expansion of the middle-class over a couple of decades, there are more poor people in Sri Lanka today than at independence.” No reference was provided, but I started digging.
This is what we might use if we were to have a tagline. We’ve been using it since our launch in 2004. But now it seems that MIT Poverty Lab research shows that hope in the heart leads to money in the pocket. Nice summary by the Economist. The results were far more dramatic.
Cambodia was the first country to have more mobiles than fixed. Finland was where the trend to mobile-only households started. And now the US is on the path. Age, poverty, subsidies seems to be contributing to the shift. And of course the prices coming down.
As researchers with a focus on government and private-sector actions that benefit the bottom of the pyramid, LIRNEasia has an interest in understanding poverty and who is poor. This summary report by the Economist gives a good overview of World Bank and ADB research on the subject. Of course, those interested are recommended to go to the sources for the real thing. BTW, for those who wonder why we keep saying that South Asia is the home to the world’s largest concentration of poor people, the answer is that the World Bank states that 595.5 million people live on below USD 1.