Tuesday, July 19, 2016

How to cut poverty – change the definition

The poor in Mexico are now richer by a third compared with last year. Not due to any increase in actual wealth and wellbeing for the country’s poor but because of changes in the methodology for measuring household earnings. The tweak will allow politicians to claim success in their anti-poverty programs and economic stewardship, even though public discontent over stagnant wages and rising prices remains widespread. The release of the 2015 edition of the Survey of Socioeconomic Conditions showed an overall real increase of 11.9% in household earnings. In some states, the increase was more than 30%, while the poorest Mexicans saw the biggest gain in earnings, according to Inegi.

According to Jonathan Heath, an independent economist in Mexico City, the National Geography and Statistics Institute (Inegi) is saying is: we’ve been overestimating poverty levels. The way that they did this” – without public consultation, the changes came as a complete surprise to social scientists and non-governmental groups,  – “raises suspicion,” he added, explaining that “The new poverty numbers are certainly going to fall by a significant amount and it’s not due to improvements, it’s not due to government action, it’s not due to anything. It’s due to the way Inegi has carried out this survey.”

The National Council for the Evaluation of Social Development Policy (Coneval), an agency responsible for measuring poverty rates and the performance of social programs put the poverty rate at 46.2% of the population in 2014, an increase of 0.7% points from 2012.
It said, “The changes lack public technical documents to justify them,” and in a statement it added the increase in household earnings “is not congruent with the trend that has been shown in other Inegi documents and with other economic variables”.

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