Solomon Islands - Asia & the Pacific

Solomon Islands: Analysis of Poverty from 2005/2006 HIESNational Poverty Lines and Estimates of the Incidence in of Poverty in Solomon Islands1. Purpose of Paper1. The purpose of this paper is to provide estimates of National Poverty Lines and the incidence of poverty forSolomon Islands based on an analysis of the household data from the national 2005/06 Household Income andExpenditure Survey (HIES).2. The HIES contains a wealth of information. This paper analyses the expenditure data to estimate the incidence ofpoverty through the Head Count Index (HCI) 2 by comparing food and basic needs poverty lines with recordedlevels of expenditure. It also estimates indicators of the depth (Poverty Gap Index, PGI) and severity (SquaredPoverty Gap Index, SPGI) of poverty in Solomon Islands and levels of income/consumption inequality through theGini Coefficient.3. It further provides an analysis of the broad characteristics of low-expenditure households in terms of their socioeconomicstatus, demographics and level of household access to basic services. Together with the povertyindicators these provide a good indication of which households are the most disadvantaged in Solomon Islands,what common characteristics they might share and why they might be in this situation of disadvantage andhardship. Such information will be useful for government to define targeted policies and interventions to assist inalleviating their poverty and hardship.4. Specifically the paper will:- Discuss the definition and context of poverty in the Pacific and Solomon Islands in particular, Section 2;- Outline the poverty analysis methodology used and provide an overview of some of the key householdand socio-economic indicators from the HIES, Section 3;- Estimate food and basic needs poverty lines for Honiara, provincial-urban and rural households 3 ; Sections4 & 5;- Provide indications of the incidence, depth and severity of poverty, and estimates of the extent ofinequality in expenditure (or income) between regions and households in Honiara, provincial-urban andrural areas, Section 6;- Outline the characteristics of poor households, defined as those in the lowest three deciles of per capitaadult equivalent expenditure, Section 7; and- Provide a summary of key policy issues arising from the analysis, section 8.5. This report presents the first attempt to establish national poverty lines for Solomon Islands. It is therefore abenchmark analysis that provides a basis for both identifying policies and monitoring the impact of targeted propoorpolicies and strategies in the medium term development framework. Solomon Islands is a signatory to theMillennium Declaration and has endorsed the Millennium Development Goals (MDGs) as key development targetsfor achievement by 2015 and support for which is an overarching goal of all the agencies that have contributedto this analysis. The better understanding of hardship and poverty in Solomon Islands afforded by this analysis willtherefore help to integrate the core poverty reduction focus of the MDGs in to national strategies. The informationand data contained in the HIES and in the analysis will contribute to an improved ability to monitor progresstowards the goals.2 The Head Count Ratio is not the same as the Poverty Indicator in Millennium Development Goal 1. The MDG 1 indicator, based on US$1 per day, is not yet available for SolomonIslands, or any other Pacific island Countries, as estimates of the Purchasing Power Parity exchange rates required to calculate the MDG indicator have not yet been finalised by SPCand the Australian Bureau of Statistics (ABS). The MDG 1 indicator, when available, will enable direct comparisons of ‘absolute” poverty levels to be made between countries. Nationalpoverty lines, which are used in this analysis, enable assessments of relative poverty within countries.3 The survey defined households as units “where normal family or household living arrangements are exercised”; and therefore excludes institutional housing such as schools,hospitals etc.Estimation of National Poverty Lines and Poverty Incidence