Poverty Isn’t A Thing

RN-jf11_ThumbHere’s a little secret development nerds know that muggles struggle with: poverty isn’t a thing.

Those newspaper stories you see about rises and falls in “the poverty rate”? They boil the question down to a single summary statistic. A rate. At most two rates (“poverty” and “extreme poverty”).

That gives the illusion that poverty is like the temperature outside or GDP or the murder rate, things that can be captured completely in one number.

But a second’s engagement is enough to realize that that doesn’t make sense.

Poverty isn’t one thing: poverty is the outcome of a huge big amorphous mass of interconnected things. The standard bit of jargon is “multi-dimensional”. Poverty is the interstice of a series of deprivations that build on one another and tend to reinforce one another: in health, in money, in education, in housing, in safety, in employment conditions, in cultural capital and access to credit and access to decision-makers and dignity and a sense of power over your own life.

This, Rodrigo, is why I can’t endorse your denunciation of the Unmet Basic Needs methodology for measuring poverty. You argue that Unmet Basic Needs is a deeply flawed measure of poverty. And you’re right, because any summary number that pretends to stand in for a concept as slippery and evanescent as poverty will be deeply flawed.

You argue the components of the UBN approach are badly conceived. But any proxy that you could imaginably construct for poverty would be flawed because poverty isn’t a thing.

You could, of course, try to build better, more detailed proxies for each of the dimensions. You could try to measure education quality rather than just years in school, or housing adequacy rather than merely rooms-per-family-member. But you very quickly realize that there’s an inverse relationship between the availability of data and its level of detail.

Of course, there’s a reason why very detailed social data is not generally available: it’s murderously expensive to gather. At some point, social scientists with limited budgets are forced to make a judgment about the marginal value of the next datum. Returns are diminishing to detail. That stands to reason.

But to stress this aspect would be a mistake. The reason it’s hard to catch smoke using a wire mesh isn’t fundamentally that it’s expensive to buy enough wire to make a fine enough mesh.

Plenty of researchers have been tempted to just roll their eyes at all this multidimensionality mumbo-jumbo and just proxy poverty via money. That seems sensible…until you start to prod it.

First, you need to be clear if by money you mean “wealth” or “income”.  Make wealth your key proxy and you quickly find yourself arguing absurdities. It’s Felix Salmon who brilliantly pointed out that on a pure wealth basis, Jerome Kerviel would be the world’s poorest person: a suave, well-educated Parisian who knows his claret from his beaujolais but happens to be 6.3 billion dollars in debt. Try telling a starving Darfuri refugee that some stock trader in Paris is less wealthy than he is.

OK, so not wealth then: income. Except that’s yet another conceptual dog’s breakfast. How? Let us count the ways.

There is an enormous academic literature on the major (arguably, insurmountable) problems with cross-country comparisons of income-based poverty rates, and with comparisons over distinct periods of time.

Newspaper editorialists tend to gloss over these difficulties, but they’re real and, tellingly, the closer researchers look into these questions, the more they tend to become convinced that such comparisons are meaningless: Angus Deaton, for one, has more or less thrown in the towel, and that guy invented purchasing power parity.

But it gets worse. There isn’t any real consensus on how you build a “poverty line” and some people argue the concept really tells us nothing at all. There isn’t real consensus on whether defining poverty as some percentage of the median wage is a sensible thing to do, though some big organizations do just that. So even in first-world, data rich settings, trying to wiggle out of poverty’s non-thingness by saying “it’s all about income” doesn’t really solve your problems: in some ways, it makes them worse.

And of course Venezuela is anything but first world and data-rich: when basic consumption basket items are unavailable, a measure that compares their notional cost to incomes quickly becomes meaningless. In the presence of the mass of contradictions our Distortioland fairground-mirror-hall economy produces, money as a synthetic measure of wellbeing is just another mirage. And where the government can manipulate monetary variables for electoral gains, you see wild swings in income-based poverty rates (like its precipitous collapse in Venezuela in 2012 and its just-as-precipitous rise in 2013) that really don’t tell us very much about the deeper social dynamics at play.

The implication in your piece, Rodrigo, was that taking a money-approach to poverty measurements would sidestep the conceptual pitfalls of counting a house as an anti-poverty win regardless of how well (or badly) the house is built. And you’re right, income-measures do sidestep that conceptual frying pan, and drop you directly into the fire.

Poverty is like that. We’re desperate to corral it into thingness, but it bucks and thrashes all the way. The more you push and prod at the concept the blobbier it gets. The more we get exasperated and demand researchers cut to the chase and give us a number that tells me how many people are poor the more violence we do to the truth.

Personally, I’ve come around to Duncan Green’s formulation: the opposite of poverty isn’t wealth, it’s power. Power both in the big political sense of having a government that responds to your needs but also, and more relevantly, in the little personal sense of having meaningful choices over your life, having the power to command quality medical care when you’re sick, having the power to ensure your children are properly educated, having the power to go out for a stroll at night without fear of violence.

In this reading, the real problem with chavismo is the way it’s hijacked the rhetoric of empowerment while providing a cheap, knock-off version of the real thing that doesn’t really expand people’s choices meaningfully. In the Venezuelan context, it’s hard to even describe the idea of poverty-as-powerlessness without coming across like a deranged chavistoid ñángara. That’s how far up the creek we are.

But I digress.

The point is, poverty can’t be measured. It can only be proxied. Every proxy will have serious problems, and the more you closely you look into them, the more you realize that those problems aren’t really brushable-offable. They aren’t the sort of things you could fix with more and better data. They cut to the conceptual bone.

Which brings us back to Unmet Basic Needs, Rodrigo. It’s bad, of course. That’s not the question. The question is whether it, (and its even cruder cousin in the measurement of multi-dimensionality, the Human Development Index,) are better than the alternatives.

To me, the answer is clear: the UBN approach is the worst possible solution to the problem of measuring poverty…except for all the others.

23 thoughts on “Poverty Isn’t A Thing

  1. I understand better data is hard to come by, but can’t we make a compromise? Improve somewhat the parameters for UBN with data we do have?

    Can’t we add the murder rate, for instance? Not getting murdered is, I believe, a rather important need of humans. Even if we have to deal with the official statistics, that’s something.

    Take drinking water. Do we need to add that? We seem to be doing great. I know in Carabobo no one drinks tap water. Even poor people buy water, the poorest try to “cook it”. Back in 1998 Carabobo might (might) have had a lower percentage of people with “tap water”, but that water was drinkable, now it is simply not.

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  2. I agree with Francisco. The ivory tower do-gooders simply cannot define poverty in a way that holds up. Poverty, can only be defined and measured within the social-economic matrix which each person lives, and these are different for every person.

    I have been in African villages in which the outward sign of a wealthy family was that their mud-daub house had a corrugated sheet metal roof instead of thatch. By most of the world’s standards, the man who owns that house is “poor”, yet I know he does not think so.

    I once took a sabbatical from my career and traveled around the world with a backpack. I had few possessions and no income during this time and used up my savings in the process. Was I poor? Most measures would say I was. However, I never felt “poor”. I always knew that I had the power to generate income again and change my outward circumstances.

    Anyone seeking to quantify such a tenuous concept as poverty should always remember that their models and measurements are only approximations, and may not have any relevance to the individuals they are attempting to measure. Always remember the axiom from Sun Tzu’s, “The Art of War”: “The map is not the terrain.”

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  3. Brilliant piece by Francisco , easy to read , well phocused , balanced and clear in presenting the options , stimulates your thought along unfamiliar routes , and ends up with a common sensical conclusion:, measuring poverty using UBM criteria is flawed but thats what we got and you play with the cards you have !!

    Cant disagree with that !! and yet …..it does call for a bit of restrain in how we totter up UBM figures , in not treating them as too conclusive or absolutely credible , they are just loose indicators of how things are but dont sit on them too hard lest you crash to the ground . The numbers they give us represent not hard evidence but signs of where approximately those facts that stand for poverty might be found .

    Wonder if it is possible to refine the UBM criteria to make it reflect more accurately the actual quality of life that people have so they are considered to be at some point along the uneven spectrum phenomena of what is called poverty . for example take account not only of the fact of having running water or electricity in the house but also how stable and frequent is the service and the potable quality of the water.!!

    One last point . the term power is emotionally very potent , exhudes too much exhuberance so that it gets us lost in ‘sexy’ political considerations , if we want to be more balanced, aseptic and conceptually chaste maybe we should use another word like capability , having power reads like banging someone on the head while being capable of ..reads like something more commonplace and benign. , .

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    • good suggestion: to replace the emotionally loaded “power” with “capability”.
      I’d even replace “capability” with “ability” so that Toro’s sentence would read:
      [Having the] ability, in the political sense of having a government respond to your needs, and more relevantly, in the personal sense of having meaningful choices over your life, having the ability to command quality medical care when you’re sick, having the ability to ensure your children are properly educated, having the ability to go out for a stroll at night without fear of violence.
      In some cases, ability is a euphemism for paying more taxes, mitigated by the ability to ensure a transparent and responsive government. Meaning, if one is generally satisfied with the government ‘de turno’, one can justify paying taxes for services rolled out by that government, for the common good.
      In most other cases, ability is a flexible term tied to one’s income generation, so that those with deeper pockets can choose private education and private health care. The state should not be expected to provide elite medicine and elite education for all. But the State should be expected, upon receiving tax contributions, to provide reasonable quality medicine and reasonable quality education for all.

      Just some thoughts.

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      • Second that , ability is a good substitution !! Actually the word capable comes from adding the latin prefix ‘cap’ which stands for ‘ample, enough , sufficient ‘ to the word for able , so capable means being amply able ..The word potestas (power) in Rome was more tied to having the force or strenght or might to command or fight . thus the celebrated phrase they used to designate their form of goverment “potestas in populum auctoritas in senatum” where potestas meant the raw power to do strenous things like engage in a war ( populus originally designated the citizen army ) and auctoritas the source of legitimacy in the traditions and moral legacy of the citys founders or fore fathers. :Sorry about the historical babble sometimes I get carried away !!

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  4. “Poverty is the interstice of a series of deprivations that build on one another and tend to reinforce one another: in health, in money, in education, in housing, in safety, in employment conditions, in cultural capital and access to credit and access to decision-makers and dignity and a sense of power over your own life.”

    Sure, poverty is a series of multiple deprivations that is hard to qualify or quantify. Generally speaking, and not to indulge in excessive cerebral complications (see what I did there..) lower poder adquisitivo. Or the stuff that a certain number of people in some geographical area can obtain or have access to by means of their wages or their eco-socio-political situation.

    Sure, that includes rather intangible, yet crucial “stuff” that determines our “quality of life” or “nivel de vida’. Things like education, sanitation, transportation, not just the basics- food, shelter, health.

    But not personal security (the “rich” can be very “poor” there, ask any millionaire in CCS) or ig electricity or water or airplanes become unavailable. So Poverty cannot be equated with “quality of life”, not to mention that some of the poorer people worldwide are sometimes happier than “rich” people..

    Still, the general concept of “poverty” ain’t that complicated. Stuff you can’t get with what you earn..

    But in the largest sense of “Poverty”, trespassing into all factors comprising “quality of life” , that’s what have been eroding at a very fast pace in Vzla. Not just people having less access to basic needs, but being unable to go to the movies or enjoy a walk in the park.

    Unfortunately, a combination of such multidimensional deprations, including raw poverty, is proving necessary to undermine this disguised neo-dictatorship, particularly the the erosion of basic “poder adquisivo” which is what really pisses most people off in our materialistic society. Sadly, further degradation of the economy will prove necessary to topple the regime.

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  5. Yes, a really brilliant post! And because I read the blog Boring Development, I get that kind of stuff delivered free to my door very regularly!

    It seems to me that Venezuelan poverty cannot be measured or reported only by reference to monetary income or wealth. We recently discussed the “phantasmagorical” quality of corporate profits reported in that way, (reference: William Neumann) and many of the same problems recur in reporting poverty and its alleviation. There may be a rough way to do it, but no one method can capture all the nuances.

    Reporting in kind, or UBN also fails unless we are exceedingly careful. As Rodrigo points out, “access to education” doesn’t mean much if it amounts to regurgitating the thoughts of Chairman Hugo, or hyperventilating about how now we have a patria. Same for access to housing if there is little space, little protection from the elements, or failures in plumbing, heating, electricity, and so on.

    So, we need to use several measures simultaneously, don’t we? There has to be some way of cross-cultural measurement which is good enough to use. Otherwise, we will fall silent due to methodological scruples, while TV trumpets: “Maduro has ended poverty!”

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    • As I was reading the first few paragraphs I was thinking: “Oops! Quico posted to the wrong blog!”

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  6. Rory Carroll is back in Venezuela and it would be interesting to read ‘his’ definition of poverty. He just tweeted this: “Back in caracas visiting in-laws. Shortages, dilapidation, muggings, water rationing, blackouts, emigration. V sad. pic.twitter.com/VFW07Mjl1i

    As a Guardian writer he’s been all over the world and has seen extreme poverty up-close. I hope he stays ‘safe’ while in Caracas….

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  7. The definition of poverty is so relative as to make no sense outside its Sphere of relativity, but the word is used for political expediency in all countries, and I am sick to death of it.Let’s keep it simple ; it makes a greater impact in the mind.I am living proof of that one.

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  8. I don’t see anywhere that Rodrigo was advocating a money-driven or income driven approach, but maybe I have missed the debate somewhere else.

    Like a judge said about obscenity, you know it when you see it, but yes, there are many many different kinds of poverty. And there is a persistent and virulent strain in Venezuela.

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      • William Vollmann’s book “Poor People” made an impression on me a few years ago. Though Vollmann clearly has strange interests and an unconventional and controversial approach (he is recently in the news again with a new book, not in a good way), he broke down poverty into a series of descriptive categories which are interesting, perhaps not so much to a social scientist but to a general reader. One of those categories is “self-determination” which I think is a lot like what Francisco is talking about with the word “power.” Another is Accident-Proneness, something I think a lot of people with any fleeting contact with poor people will recognize.

        Another of those categories is “Invisibility”. I thought of that when I first read the story on the kids burning to death in their home in Barinas you refer to, and I think of it again today when I read this:

        http://www.eluniversal.com/nacional-y-politica/140714/solicitan-a-la-fiscalia-investigar-muerte-de-53-recien-nacidos-en-barinas

        Lots of poor people can die without people noticing or making inquiries. Who knows what kinds of tragedies of neglect, incompetence, mass homicide and whatnot are going on beyond peoples’ consciousness, among the poor. Fifty-plus babies die: El Universal writes a couple of paragraphs. Compare that to the coverage a murdered German businessman on his way to the Eurobuilding Caracas gets, or a soap star.

        That is not to say that we should not care about harm to rich people too- we should- but the general lack of good “data”, which is really another way of saying people are not noticing, even in the face of extraordinary tragedy and incompetence, is itself a signifier of poverty. To flip the coin, I am not poor, because I am well known: my every interest, concern and characteristic is minutely tracked and studied, and marketed to. People can predict, with a high degree of precision, what kind of beer I will drink, what kind of toothpaste I will use, what my voting preferences are, when I will retire. Not so for poor people, although I would say that probably Coca Cola, Pepsi and Nestle know more about the lives of poor people than most university faculties. Even they are a demographic to some degree.

        In any event, you and Francisco know far more about this subject, and your observations raise a number of interesting ideas and questions for the rest of us. How to describe poverty in any meaningful, quantifiable sense, rather than general description and observation, is a hard question. Being unknown seems to be at the core of what it is to be poor.

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  9. …on a pure wealth basis, Jerome Kerviel would be the world’s poorest person…

    This is why I question the value of the Gini coefficient as usually constructed. In any given year, the lowest income people are wealthy individuals having a bad year in business or speculation. Suppose there is a “bubble burst”, like the tech-stock crash of 2000 or the real estate crash of 2008, and the 1,000 richest individuals each lost half their assets; the Gini coefficient would increase, as those people would now fall into the lowest decile or quintile, massively reducing the aggregate income of “the poor”.

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  10. There is a distinction made by the students of poverty between the chronically poor and the transient or marginally poor because, there is always a group of people who live on the fringes of poverty but who depending on circumstances can for long periods scape the ravages of poverty and lead a life of relative comfort , people who shift from being poor to being relatively comfortable depending on varying economic circumstances . Evidently the chronically poor represent more iconically the conditions of poverty than those that are able for long period,s sometimes streching for years, to scape from the condition and lead somewhat sattisfactory lives..

    There is also the condition of people who are fringe poor in the sense that they can sattisfy their basic needs but otherwise are deprived of many of the things that make for a full satttisfactory life . Take for instance the average citizen of cuba who can sattisfy just barely their basic needs and have access to education but otherwise cannot enjoy the living conditions which we associate with a life of welfare !! People in Cuba have education but are also exposed to food shortages which cause them to suffer periods of near starvation. Their access to goods that make for a comfortable life are strictly rationed or totally denied ..

    Poverty appears to be a spectrum phenomena ,which also doesnt state put but moves to afflict more or less people as economic conditions worsen or improve.

    Then there is the impact which chronic poverty has on the mind and character and social habits of its victims , sometimes maiming their capacity to scape poverty through their own efforts , giving them a mind set where they are easily fooled or deceived by rogue demagogues or snake oil charmers !!,

    Measuring all these complex dimensions of poverty can indeed be challenging !!

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  11. “A need is not a good. It denotes a condition to be fulfilled before some natural virtue can be exercised and some true good thereby attained. To feel needs is to feel separated from the good by some unfulfilled prerequisite to possessing it.” —George Santanaya, Dominations and Powers, 1951. Power, ability, choice: Unfulfilled prerequisites to now remain unfulfilled in the hands of 21st century socialism.

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    • Long long time since i last read a quote from Jorge Ruiz de Santayana , moreover one applied so aptly to a contemporary issue .

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  12. Francisco, try Amartya Sen’s poverty index…the kind of “proxy” which I fathom it as cogent enough for overhauling poverty.

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  13. Oh, that’s rich. A little time away from internet and I come back to read quibbling on the definition of poverty. Talk about looking at the finger instead of focusing on to what it points!

    Let’s assume you’re right, Quico, and poverty is too huge a multi-dimensional mass of factors to call a thing, a shapeless cloud that changes shape every time you try to poke at it.

    Fine. Discussion over. But then let’s talk about what are things. Having enough to eat every day is a thing. In a capitalistic society, having enough to eat every day has a cost. Whether the cost is to the government in providing food, or to the consumer in buying it to eat, the cost for the food is also a thing.

    When people looking to take action in improving the lives of those worst off talk about providing needs or providing money for needs, we’re not talking about eliminating poverty of mind, nor poverty of soul, nor many of the countless other aspects of the cloud of poverty. We’re usually referring to things similar to Maslow’s pyramid bottom. This is because, having a minimal nutritionally balanced diet is the single factor of the multi-dimensional cloud of poverty that would most greatly improve upon the total cloud.

    You can try and point to a person that owns five yachts but no income as a counter example to those suggesting measures of income, but that’s a strawman argument. That person still needs to eat, and may have no way to get money for those yachts quickly enough to eat, in which case he may die of hunger, or he may obtain a loan or a sale, in which case he is no longer as poor as another who had nothing and no income, either. Besides, how representative are those cases? So, spare us the quibble.

    People need certain basics. These can, either be provided for them, or the means for them to provide these for themselves, but these needs must be met. That is what we’re talking about. Thus, insinuating that Unconditional Bonus Income would not reduce the cloud of poverty hanging over Venezuela, well, that’s just rich.

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