SOLOMON ISLANDS GOVERNMENT SOLOMON ISLANDS POVERTY MAPS Based on the 2012/13 Household Income and Expenditure Survey and the 2009 Population and Housing Census SOLOMON ISLANDS POVERTY MAPS BASED ON THE 2012/13 HOUSEHOLD INCOME AND EXPENDITURE SURVEY AND THE 2009 POPULATION AND HOUSING CENSUS SOLOMON ISLANDS NATIONAL STATISTICS OFFICE THE WORLD BANK GROUP DECEMBER 2017 TABLE OF CONTENTS Foreword....................................................................................................................................................................... ii Acknowledgements ..................................................................................................................................................... iii ABBREVIATIONS AND ACRONYMS .....................................................................................................................iv EXECUTIVE SUMMARY ........................................................................................................................................... v 1. Introduction ........................................................................................................................................................... 1 2. Overview of the Methodology .............................................................................................................................. 3 3. Data ....................................................................................................................................................................... 7 3.1 Census .......................................................................................................................................................... 7 3.2 HIES ............................................................................................................................................................. 7 3.3 Poverty Line ................................................................................................................................................. 8 4. Empirical Analysis ................................................................................................................................................ 9 4.1 Comparing the Questionnaires ..................................................................................................................... 9 4.2 Comparing the Variables ............................................................................................................................ 10 4.3 Variable Selection for Initial Models ......................................................................................................... 14 4.4 Estimation of the Final Models .................................................................................................................. 15 5. Results ................................................................................................................................................................. 16 5.1 Comparison with National and Provincial Poverty Estimates from the Survey ......................................... 16 5.2 Comparing Results of National and Subnational Models .......................................................................... 18 5.3 Ward-level Poverty Maps .......................................................................................................................... 20 5.4 Ward-level Welfare Profiles....................................................................................................................... 21 5.5 Validation ................................................................................................................................................... 22 5.6 Analytical Uses of the Ward-level Estimates ............................................................................................. 24 6. Conclusions ......................................................................................................................................................... 25 References ................................................................................................................................................................... 42 Appendix A: Initial Beta and Alpha Models ............................................................................................................... 43 Appendix B: Final Beta and Alpha Models from PovMap2 ........................................................................................ 50 i Acknowledgements This report is the result of collaborative work between the Solomon Islands Government and development partners in pursuing a shared goal in the alleviation of poverty in the Solomon Islands and in the pacific region. We must, first of all, acknowledge that this analysis could not have been achieved without the valuable support of a number of people and organisations. We want to firstly acknowledge the contribution of Professor John Gibson (World Bank Consultant) who was the principle author of this analytical report. We also acknowledge reviewers who provided comments on the draft analysis, namely the peer reviewer, Nobuo Yoshida (Lead Economist, World Bank), and Virginia Horscroft (Senior Economist, World Bank). We would also like to thank Imogen Cara Halstead (World Bank-Sydney) and Kristen Himelein (World Bank-Washington) for overall project coordination, additional analysis in the production of brochures and commentary of the draft report. Both these officers, in addition to Judy Yang (World Bank) and Minh Nguyen (World Bank), are also acknowledged for providing capacity building to staff of the NSO in the analysis and dissemination. In addition, a word of thanks is conveyed to Karla Yee Amezaga for the production of additional maps of census data for the technical report, and to Lauren Cassar for the design and thematic layout of supplementary dissemination material. We are also grateful to Willie Lahari, resident Statistics Advisor for technical support and advice to the Solomon Islands Government through the NSO and on-going coordination with the World Bank and the Australian Government’s DFAT in Honiara. The Solomon Islands Government through the NSO and the MOFT is acknowledged for its strong leadership, guidance and overall management throughout the development process, including sharing of the 2012/13 HIES and 2009 census datasets for this project. Special thanks must go to Mr. Douglas Kimi, Government Statistician and staff of the NSO. In addition, the Permanent Secretary, Mr. Harry Kuma is also acknowledged for his administrative oversight at the ministry level. A number of persons who provided various administrative, coordination and logistic support in- country and abroad since the inception towards the development of this project include Oleksiy Ivaschenko (World Bank), Manohar Shamar (World Bank) and Carlos Orton Romero (World Bank- Honiara Office). Lastly, we would like to sincerely thank the Australian Government’s DFAT-Aid Program for funding support towards this project and program management support through the Education-Statistics Program, especially from Moses Tongare, Jane Bastin-Sikimeti and Leah Horsfall. For further information and enquiries, please contact the NSO on phone: 677 27835 or email: [email protected] or contact the World Bank-Solomon Islands on 677 21444. Harry Kuma Douglas Kimi Guido Rurangwa Permanent Secretary Government Statistician Resident Representative Ministry of Finance and Treasury, National Statistics Office World Bank Office, Solomon Islands Ministry of Finance and Treasury, Honiara Solomon Islands Solomon Islands ABBREVIATIONS AND ACRONYMS CPD Country-Product-Dummy EA Enumeration Area ELL Elbers, Lanjouw, and Lanjouw (2003) Approach GLS Generalized Least Squares HIES Household Income and Expenditure Survey NGO Nongovernmental Organization SIWA Solomon Islands Water Authority iv EXECUTIVE SUMMARY Poverty mapping is a powerful way to identify and monitor small areas of particular affluence and poverty across the country. In this study, detailed maps of poverty in the Solomon Islands are created by combining information from the 2012/13 Solomon Islands Household Income and Expenditure Survey (HIES) with data from the 2009 Solomon Islands Population and Housing Census. The Solomon Islands HIES is an extremely rich survey, including comprehensive questions on households’ consumption and expenditure. The resulting data can, and have, been used to estimate poverty rates at the national and provincial level. However, HIES data are only collected for a limited sample of households, and so they cannot be used in isolation to construct a complete picture of poverty at the ward level. On the other hand, while the 2009 census covered all households across the country, censuses include insufficient detail for estimating consumption- based poverty directly. Poverty maps reflect the results of a statistical exercise designed to link HIES and census data in order to derive small-area estimates of poverty. The exercise exploits a subset of variables common to both the census and the HIES (e.g. relating to household demographics and dwelling characteristics). It uses the parameter estimates from a consumption model derived using the HIES data to simulate consumption data for each census household. These simulated consumption data are then used to derive poverty rates at the ward level using the same poverty lines used for the official poverty estimates based on the HIES data. This study focuses