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Estimating regional poverty lines with scarce data: an application to Brazilian regions

Fernando G. da Silveira, Alexandre X. Carvalho, Carlos R. Azzoni, Bernardo Campolina, Antonio Ibarra

Silveira, Fernando G. da, Alexandre X. Carvalho, Carlos R. Azzoni, Bernardo Campolina, and Antonio Ibarra. "Estimating Regional Poverty Lines with Scarce Data: An Application to Brazilian Regions." Paper presented at the 46th Congress of the European Regional Science Association, Volos 2006.

Abstract: The recent emphasis on fighting poverty in Brazil makes the determination of the size of the targeted population an important issue (What is the right poverty line? What is the real size of the poor population? How much money should be given to each poor family?). The application of poverty lines based on national income levels tends to produce important distortions at the regional level. Using data from a Household Expenditure Survey (HES) that covered some regions in Brazil, the paper develops and applies a methodology to define poverty lines for all regions and urban areas. These lines are based on nutritional requirements, thus avoiding the purchasing power parity problem, and take into account non-monetary income and in-kind consumption, aspects that are very important at the rural level. The HES results are matched with Census data, allowing for the estimation of rural and urban poverty lines for Brazilian regions.