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A Simple Poverty Scorecard for the Philippines

A Simple Poverty Scorecard for the Philippines

A Simple Poverty Scorecard for the Philippines

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6.1 Calibrating scores with poverty likelihoodsA given score is non-parametrically associated (“calibrated”) with a povertylikelihood by defining <strong>the</strong> poverty likelihood as <strong>the</strong> share of households in <strong>the</strong>calibration sub-sample who have <strong>the</strong> score and who are below a given poverty line.For <strong>the</strong> example of <strong>the</strong> national line (Figure 5), <strong>the</strong>re are 5,198 (normalized)households in <strong>the</strong> calibration sub-sample with a score of 20–24, of whom 4,205(normalized) are below <strong>the</strong> poverty line. The estimated poverty likelihood associatedwith a score of 20–24 is <strong>the</strong>n 80.9 percent, because 4,205 ÷ 5,198 = 80.9 percent.To illustrate with <strong>the</strong> national line and a score of 40–44, <strong>the</strong>re are 8,846(normalized) households in <strong>the</strong> calibration sample, of whom 3,257 (normalized) arebelow <strong>the</strong> line (Figure 5). Thus, <strong>the</strong> poverty likelihood <strong>for</strong> this score is 3,257 ÷ 8,846 =36.8 percent.The same method is used to calibrate scores with estimated poverty likelihoods<strong>for</strong> <strong>the</strong> o<strong>the</strong>r poverty lines.Figure 6 shows, <strong>for</strong> all scores, <strong>the</strong> likelihood that income falls in a rangedemarcated by two adjacent poverty lines. For example, <strong>the</strong> daily income of someonewith a score of 35–39 falls in <strong>the</strong> following ranges with probability:• 18.6 percent below <strong>the</strong> food line• 30.3 percent between <strong>the</strong> food and national lines• 26.1 percent between <strong>the</strong> national and USD2.50/day 2005 PPP lines• 17.2 percent between <strong>the</strong> USD2.50/day 2005 PPP and USD3.75/day lines• 4.6 percent between <strong>the</strong> USD3.75/day 2005 PPP and USD5.00/day lines• 3.1 percent above <strong>the</strong> USD5.00/day 2005 PPP line22

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