Implications of Using Nonstandard Poverty Lines : An Illustration Using the Case of the ArabRepublic of Egypt

Many developing countries’ official poverty methodologies rely on nonstandard poverty lines,which complicate poverty comparisons across space or time. The paper considers the case of the Arab Republic of Egypt,whose official poverty lines have two important nonstandard features. First, the line is neither absolute nor relative,but rather hybrid or “weakly relative.” Second, the poverty line’s implicit equivalence scales are not fixed, but arerather endogenous. This paper provides a conceptual and quantitative understanding of these two nonstandardfeatures. The results reveal that the equivalence scale implicit in the official methodology is quantitatively verysimilar to the (simpler) per capita equivalence scale. Switching to a per capita equivalence scale would helpaddress an implicit gender bias that the paper identifies in Egypt’s official poverty lines. The analysis shows that theofficial distribution of poverty across regions is very similar to that associated with a purely absolute line. Inaddition, the change in official poverty rates over the period analyzed (2015 to 2017/18) lies halfway between thelarger increase captured by a purely absolute line (10 percentage points) and that captured by a purely relativemeasure (1 percentage point). However, the results show that these more standard poverty lines do not systematicallyperform better than the official methodology with respect to the identification of disadvantaged households.