The 1995/1996 Household Income, Expenditure - (PDF, 101 mb ...

III. 7
in the measurement of poverty,11 is but one characteristic of a complex
quality of life unique to each environment. Whether or not an effort is
made to include public goods in welfarist or in society-based
measurements is beside the point; the linkage between the existence of
public goods and their usage (by extension, a higher living standard) is
not assured.
The unit of analysis - individual versus household - conditions
the measurement of poverty. Individual data may be preferred to
household data for their information richness, but sometimes the
assumptions required to make inferences using individual data are
unreasonable. For example, in comparing the poverty of individuals
based on calorie intakes, one assumes that an individual of a certain
sex, age, height and weight requires a certain number of completenutrition
calories per day, and that this requirement (Le., level of
activity), and even metabolic rate, stays constant. However, activity
levels themselves can depend on calorie consumption, an interaction
which greatly confounds the equation for nutrition requirements. Even
after controlling for the higher share of food expenditures typical of
the poor, the correlation between food energy consumption and
expenditures can be different across areas. The food-energy method
alone is deficient for constructing poverty indices because food energy
intake also varies with income levels, over time and across areas. The
mere fact that a certain diet meets the requirements for a functioning
human body is irrelevant to whether such a diverse diet will be sought
after, or even less likely, available in the market.
IH.D Poverty and Household Expenditure Data
In the empirical section which follows, I use income and
expenditure data from Egypt's HIECS to make provisional inferences
about poverty and inequality.
Before choosing an indicator to represent economic rank,
statistical integrity depends on the proper sampling design. For
economic information to characterize households in a valid way: 1)
households should be selecte?z randomly, such that each has an equal
probability of being sampled; and 2) households should be selected
independently of one another. Discounting anumber of potential nonsampling
errors, these are the minimal measures taken to assure that
estimates about the population using sample units will be unbiased (Le.,
on target within a certain bound) and have smooth, well-defined
distributions. Another concern, more a prescription than a rule, is that
"enough" households are sampled so that the law of large numbers
applies. With household expenditure survey sampling, there is always a
concern that the sample does not cover every household, that despite
11 See Deaton (1988) for an exposition on assigning values to public
goods of variable quality.
12 If stratified random sampling is used, the within-stratum selection
should be random.