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Small Area Estimation of Poverty in Rural Bhutan

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Small Area Estimation of Poverty in Rural Bhutan Small Area Estimation of Poverty in Rural Bhutan Technical Report jointly prepared by National Statistics Bureau of Bhutan and the World Bank June 21, 2010 National Statistics Bureau South Asia Region Economic Policy and Poverty Royal Government of Bhutan The World Bank Acknowledgements The small area estimation of poverty in rural Bhutan was carried out jointly by National Statistics Bureau (NSB) of Bhutan and a World Bank team – Nobuo Yoshida, Aphichoke Kotikula (co-TTLs) and Faizuddin Ahmed (ETC, SASEP). This report summarizes findings of detailed technical analysis conducted to ensure the quality of the final poverty maps. Faizuddin Ahmed contributed greatly to the poverty estimation, and Uwe Deichman (Sr. Environmental Specialist, DECEE) provided useful inputs on GIS analysis and creation of market accessibility indicators. The team also acknowledges Nimanthi Attapattu (Program Assistant, SASEP) for formatting and editing this document. This report benefits greatly from guidance and inputs from Kuenga Tshering (Director of NSB), Phub Sangay (Offtg. Head of Survey/Data Processing Division), and Dawa Tshering (Project Coordinator). Also, Nima Deki Sherpa (ICT Technical Associate) and Tshering Choden (Asst. ICT Officer) contributed to this analysis, particularly at the stage of data preparation, and Cheku Dorji (Sr. Statistical Officer) helped to prepare the executive summary and edited this document. The team would like to acknowledge valuable comments and suggestions from Pasang Dorji (Sr. Planning Officer) of the Gross National Happiness Commission (GNHC) and from participants in the poverty mapping workshops held in September and December 2009 in Thimphu. This report also benefits from the feasibility study conducted on Small Area Estimation of poverty by the World Food Program in Bhutan. Finally, the team would like to thank Nicholas J. Krafft (Country Director for Bhutan) and Miria Pigato (Sector Manager of SASEP) for their generous and continued support for this analysis and the preparation of this report. 1 ABBREVIATIONS, ACRONYMS, AND GLOSSARY BLSS Bhutan Living Standard Survey MDGs Millennium Development Goals dzongkhag District NSB National Statistics Bureau ELL Elbers et al. RGOB Royal Government of Bhutan gewog Sub-district SAE Small Area Estimation GIS Geographical Information System WDR World Development Report (WDR) GNHC Gross National Happiness WFP World Food Program Commission 2 Table of Contents Executive Summary ................................................................................................................... 4 Section I: Introduction ............................................................................................................... 5 Section II: Poverty Mapping Method ........................................................................................ 6 Methodology ....................................................................................................................................... 6 Main Data Sources .............................................................................................................................. 7 Technical Challenges .......................................................................................................................... 8 Production of Poverty Maps and Quality Checks ............................................................................... 9 Section III: Poverty Mapping Results ...................................................................................... 16 Poverty Headcount Rate vs. Number of Poor Population ................................................................. 17 Poverty maps with other geo-referenced data ................................................................................... 18 (i) Market Accessiblity and Poverty .............................................................................................. 18 (ii) Access to Education and Poverty .......................................................................................... 19 (iii) Electrification and Poverty .................................................................................................... 19 (iv) Gender and Poverty ............................................................................................................... 20 Section IV: Conclusion ............................................................................................................ 21 Caveats .............................................................................................................................................. 21 Poverty Mapping as a Regular Monitoring Instrument ..................................................................... 21 Combining Poverty Maps with Geographical Database ................................................................... 21 References ................................................................................................................................ 23 Annex I: Results of Rural Poverty Map ................................................................................... 24 Annex II: Results of Consumption Models ............................................................................. 29 Annex III: Accessibility Indicators .......................................................................................... 33 Annex IV: Descriptions of national poverty line, specifics of BLSS data, and Census .......... 35 Annex V: Standard errors and statistically distinguishable rankings ...................................... 37 3 Executive Summary The Small Area Estimation (SAE) of Poverty in Rural Bhutan was prepared with an objective to provide a more disaggregated picture of poverty in Bhutan down to the gewog level, based on the Bhutan Living Standard Survey (BLSS) 2007 and Population & Housing Census of Bhutan (PHCB) 2005. The analysis was carried out by the National Statistics Bureau (NSB) and the World Bank in response to the emerging need of the Royal Government of Bhutan (RGOB) especially for effective resource allocation to all the gewogs. The report records the estimation process in detail and describes results of statistical tests for quality checks. According to these tests, the poverty estimates at the gewog level are reliable. The report also enhances the transparency of the process and intends to serve as a guide for future updates. According to the Poverty Analysis Report (PAR) 2007, about one-fourth of the country’s population is estimated to be poor with rural poverty as high as 30.9 percent. It also shows that poverty rates are high in Zhemgang, Samtse, Monggar and Lhuntse dzongkhags. This report, which presents some results of the SAE, compliments the PAR 2007 by further identifying pockets of poverty in these dzongkhags as well as in other dzongkhags The results from the SAE are compared with other geo-referenced database. It is observed that, generally poor gewogs tend to have limited access to markets and road networks. Similarly, access to rural electrification is relatively low in poor areas while densely populated but non-poor gewogs in Paro, Chukha, Thimphu and Punakha have high rates of rural electrification. Furthermore, the poverty incidence of each gewog is highly associated with school attendance of children. For example, poor gewogs register lower school attendance compared with non-poor gewogs. As such, overlaying a poverty map with other geo-referenced indicators is highly informative, and some of these findings can be used for designing, planning and monitoring poverty alleviation strategies at the gewog level. 4 Section I: Introduction 1. Over the past 10 years, Bhutan has performed remarkably well in reducing poverty. However, vast differences in poverty levels across dzongkhag (district) and gewog (sub-district) persist. Popular perceptions suggest that the geography of poverty and of economic affluence is accentuated at the local level, and that an understanding of the spatial distribution of economic welfare is needed in order to spread the benefits of growth to lagging regions. In order to fulfill Bhutan’s development philosophy of gross national happiness, and poverty reduction, it is essential to understand its geographic and spatial patterns. In the case of Bhutan, its land-locked geography and sparse population pose major challenges for poverty reduction. Poverty maps will help the government and development partners locate pockets of poverty which might otherwise be overlooked. 2. The Royal Government of Bhutan (RGOB) is committed to carrying out various programs to alleviate poverty and deprivation, and to achieve the Millennium Development Goals (MDGs). Although many of these programs are centrally funded, they are frequently carried out at dzongkhag and gewog levels. However, limited data on poverty and other key human development indicators at the sub- national levels constrain the local and central governments’ capability to monitor spending and outcomes. As asserted in the 10th Five Year plan, allocating resources to poor gewog is essential to assisting them tackling their residents’ poverty. 3. Precise poverty estimates at the gewog level will facilitate the implementation of the newly- introduced, formula-based mechanism for resource allocation from the central government to all gewogs. Previously, in the absence of poverty maps, all gewogs in a dzongkhag were assumed to have equal poverty rates. However, following the preparation of the new poverty maps, the block grants can now incorporate
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