Tuesday, April 30, 2013

Fat Free Econ 42: NSCB vs SWS Data on Poverty

* This is my article today in interaksyon.com, TV5's news portal.

Last week, the country was bombarded with stories that carried descriptions such as “high poverty”, “poverty unchanged”, “more than half of Filipinos poor,” among other variations. Two institutions triggered these stories.

Last Tuesday, the National Statistical Coordination Board (NSCB) released its2012 First Semester Provincial Poverty Statisticsreporting that poverty incidence at 28 percent of the population in the first half of last year was unchanged from the same period in 2006. The subsistence incidence based on a food threshold was 13.4 percent last year, slightly lower than the 14.2 percent in 2006.

The following day, the Social Weather Stations (SWS) released its First Quarter 2013 Social Weather Survey: Families rating themselves as Mahirap or Poor at 52%The self-rated food poverty based on food threshold budget stood at 39 percent of the population.

Notice the big gap in Philippine poverty incidence: 28 percent according to the NSCB, but 52 percent according to the SWS. The subsistence incidence stood at 13.4 percent as per NSCB, but three times as per SWS at 39 percent. What explains the big difference?

First, the NSCB report was based on the Family Income and Expenditure Survey (FIES) of the National Statistics Office, whereas the SWS report was "self-rated." The former used highly quantitative measurements while the latter was based on a subjective assessment by the respondents.

The FIES involved nearly 51,000 respondents nationwide, answering 70 pages of a questionnaire, while the SWS involved 1,200 respondents nationwide, answering a few pages of a questionnaire.

Second, the threshold levels were different. Under the NSCB, food and subsistence threshold was P5,458; non-food needs, P7,821, for a minimum P13,279 per month poverty threshold.

The SWS’ food poverty threshold for Metro Manila was P8,000 per month while overall poverty threshold was P15,000 per month. But notice the arbitrary and inconsistent figures through the years.

In March 2013, the self-rated poverty threshold in Metro Manila was P15,000 per month. It was the same in March 2011, September 2009, June 2008, March 2004 and November 2003. The self-rated threshold was highest at P18,000 in October 2009, and was only P10,000 in December 2011 and September 2010, much lower than the P15,000 in March 2004 and November 2003. Very arbitrary and highly subjective.

For self-rated food poverty in Metro Manila, this stood at P8,000 per month in March 2013, March 2011 and March 2010, but at P8,500 in March 2012 and October 2009. Very arbitrary and highly subjective.

There was a tendency for survey respondents to somehow exaggerate their degrees of poverty and needs for at least two reasons. One is that it could prod the government -- both national and local -- to expand existing subsidies, or invent new aid programs on top of existing ones, if poverty and hunger incidence remained high.

Two, people would not reveal that one reason for their poverty and/or hunger was their high consumption of alcohol and tobacco products, or high spending on lotto, jueteng, cockfighting and other forms of gambling, relative to their household income. There is a tendency to under-report or fail to report this kind of spending in poverty surveys, whether done by the government or private outfits like the SWS.

Mentioning the second reason would be considered as “politically incorrect” because it is tantamount to “blaming the victim.” But those who say this should recognize that the ultimate victim in society would be the taxpayers, especially the fixed-income earners, who are automatically deducted 30 or 32 percent monthly, as government keeps expanding its expenditures.

While we cannot stop the SWS –- or any other private survey firm -- from conducting its subjective and even emotion-based “self-rated poverty” survey, people should be informed or warned of the potential for sensationalism and alarmism. They make good news, good headlines -- imagine the stark contrast between persistent poverty and record economic growth.

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