Estimation of Poverty Rates by Calorie Decomposition Method

In this chapter we use the member wise expected calorie consumption of the households to arrive at the poverty rates. For a given household, we compute the per capita average expenditure of each member of the household depending on whether the household belongs to rural or urban sector. The weighted sums of the expected amount of calories consumed by the members are then found separately for male and female members of the household, where the weight is the number of members in each category. In a similar manner we get the sum of calorie norms of members in the household. The calorie norm of the household is compared with the estimated calorie consumption to determine whether the household is poor. If a household is poor then it is given a dummy value ‘1’, otherwise it is given the value ‘0’. Weighted means of these dummy values give us the poverty ratios. This calculation is carried out separately for rural and urban India. The urban poverty ratios are found to be higher than the corresponding rural poverty ratios. This is because the activity status of people is not considered. The need for the daily calorie consumption of urban people is less because most of them they work less. All modern facilities like transport and machineries to give relief to work are more available to urban people. But in our calculations, we did not assume it. There may be other reasons also. Urban people take fast food in the streets more than rural people and these are often not reported.