INSIGHT

By Saif Manzoor, June 2008http://www.ilmoamal.org/?go=income_calc

Who is poor? This is a very simple question but in reality very difficult to answer.  

Many people refer to the World Bank’s “one-dollar-a-day” poverty line.  It uses a concept of purchasing power equivalence that, in the opinion of many experts, does not reflect the real requirements of the poor and in the wake of rising food prices, almost useless for assessing whether a person or family is poor or not.  

In the absence of a yardstick to measure poverty many people try to judge the poverty only by appearances without any objective analysis and without taking into account the needs and resources of a family. 

During the course of our welfare programs we regularly come across similar situations where we need to assess the needs of a family and compare it with their income and determine if they need any help. To fill this vacuum we developed the family need calculator. It is a simple web-based tool and works as follows: 

1) First we capture the following information:           

a) Number of adults and children in the family           

b) Number of school going children           

c) Rent           

d) Any special medical expenses in the family           

e) Other expenses (excluding food, schooling and medical)           

f) Total income of the family 

2) We calculate the food expenses for the family based on number of adults and children based on the recent food prices and on the following assumptions: 2200 calories per day for adult male, 1900 calories per day for adult female, 1600 calories per day for a child 

3) Schooling is assumed to be at rupees 500 per school going child4) We add food expenses, rent, schooling, medical and other expenses to get the total needs of the family5) We deduct it from total income to get the shortage or excess of income versus the requirements 

Benefits of this approach

1) Reflects the most recent prices

2) Takes into account all the basic needs 3) Takes into account the income

4) Web-based so any one can use it

http://www.ilmoamal.org/?go=income_calc