INSTITUTE OF RURAL

DEVELOPMENT PLANNING
Department of Population Studies

Module: Population and

Poverty Analysis
Module Code: PDUP 8202

Instructor: Issa H. Issa

 Module Contents
1. The linkages between population growth and poverty
a). The concepts of population growth and poverty
b). Linkage between population growth and poverty
c). Population growth on environmental resources
2. Theories linking population and development
a). The theories of population growth and poverty
b). Population, development & poverty theoretical linkages
3. Poverty Indicators, distribution and measures
a). Poverty indicators and distribution in Tanzania
b). Poverty measures and their calculations
4. Rural-urban differentials and strategies for poverty reduction
a). Rural urban differentials and linkages in poverty
c). Strategies for poverty reduction in rural and urban areas
2
 References
1. Brandolini, A., Magri, S. and Smeeding, T. M. (2010), Asset-based measurement of poverty. J. Pol. Anal.
Manage., 29: 267–284. doi:10.1002/pam.20491
2. Alkire, S., Santos, M. E. (2010) Acute Multidimensional Poverty: A New Index for Developing Countries.
United Nations Development Programme Human Development Report Office Background Paper No.
2010/11. Available at SSRN: https://ssrn.com/abstract=1815243 or http://dx.doi.org/10.2139/ssrn.1815243
3. Blackwood, D.L. and Lynch, R.G. (1994): The Measurement of inequality and poverty: A policy maker’s
guide to the literature. World Development, 22 (4): 567-578.
4. Deaton, A. and Zaidi, S. (2002): Guidelines for Constructing Consumption Aggregates for Welfare Analysis:
Living Standards Measurement Study: Working Paper No. 135. World Bank. Washington DC.
5. United Republic of Tanzania (2003): Integration of population Variables in Development Planning. DTU,
University of Dar es Salaam
6. United Republic of Tanzania (URT) (1999): Poverty and Welfare Monitoring Indicators. Dar es salaam, Vice
President’s Office
7. Deaton, A. and Zaidi, S. (2002): Guidelines for Constructing Consumption Aggregates for Welfare Analysis:
Living Standards Measurement Study: Working Paper No. 135. World Bank. Washington DC.
8. United Republic of Tanzania (2003): Integration of population Variables in Development Planning. DTU,
University of Dar es Salaam
9. United Republic of Tanzania (URT) (2000): Poverty Reduction Strategy Paper (PRSP). Dar es salaam,
Vice President’s Office
10. World Bank (2001): World Development Report 2000/2001: Attacking Poverty: Overview, Washington DC.
2
 Concepts and Issues in Population
growth and Poverty
• Introduction
• The terms population growth, economic growth
and poverty are interrelated with each other.
• It has been established that, large population has
the tendency leading to market expansion which
in turns creates room for sustained growth in the
country’s gross domestic product (GDP) thereby
providing opportunities for reduction in both
absolute and relative poverty amongst the
residents of the respective country. 2
 The concepts of Population and
Population growth
• The term population (human
population) refers to the total number of
persons residing in a geographical
location, area, country, region or sphere
at a particular point in time.
• There are three important factors
heavily determine the population of a
country: birth rate, death rate and
2

migration
 The concepts of Population and
Population growth (Cont……)
• The birth rate
• This is the average number of births during a
year per 1,000 persons in the population at
midyear.
• It is often referred as Crude Birth Rate (CBR).
Birth rate is usually the dominant factor in
determining the rate of population growth as
it depends on both the level of fertility and
the age structure of the population. 2
 The concepts of Population and
Population growth (Cont……)
• Birth rate could also be defined as the total
number of live births per 1,000 of a
population in a year.
• The rate of births in a population can be
estimated using several means: the number
of live births from a universal registration
system for births, deaths, and marriages;
population counts from a census, and
estimation through specialized demographic
2
techniques
 The concepts of Population and
Population growth (Cont……)
• The death rate
• This is also referred to as the mortality rate.
It is expressed in units of deaths per 1,000
individuals per year; thus, a mortality rate of
9.5 (out of 1,000) in a population of 1,000
would mean 9.5 deaths per year in that
entire population, or 0.95% out of the total.
• It shows the rate at which people died in a
particular place or during a particular time.
2
 The concepts of Population and
Population growth (Cont……)
• The death rate (cont….)
• It also expresses the ratio of total deaths to
total population in a specified community or
area over a specified period of time and can
be taken as a measure of the number of
deaths (in general, or due to a specific cause)
in a particular population, scaled to the size
of that population, per unit of time.
2
 The concepts of Population and
Population growth (Cont……)
• Migration
• It refers to a situation where people move from
their usual residence or country and settle in
another, either as a temporary or permanent
abode.
• A person who moves from his country is called
emigrant in his/her country and an immigrant
in the country in which he moves into, and out-
migrant and in-migrant if its withing the
2
country respectively.
 The concepts of Population and
Population growth (Cont……)
• Migration
• Thus, emigration is the movement of nationals
out of their country while immigration is the
movement of foreigners into a foreign country.
• The difference between the number of
emigrants and that of immigrants is referred to
as the net migration.
• Hence, while immigration increases the
population of a country, emigration decreases
2
a country’s population.
 The concepts of Population and
Population growth (Cont…….)
• The total population of a country is divided to
accommodate two groups of persons: those
who cannot actively participate in the current
production of goods and services and those
who are currently actively participating in the
production of goods and services.
• The former constitutes the dependent
population while the later constitute the active
population which is often referred to as the
country’s labour force. 2
 The concepts of Population and
Population growth (cont…..)
• The labour force is further categorized into two
components: those in the labour market and
those not in the labour market.
• The labour market thus comprises of two
groups of people: those who are currently
engaged in the production of goods and
services and those who are still actively
searching for jobs.
• Thus, those who are not in labour market
constitute of people who are not willing to work.
2
Fig 1: compositions of a country’s population

2
 The concepts of Population and
Population growth
• Population is not a static concept; it is dynamic
because its constituents change in size and
quality as frequently as possible.
• For example, there are possible movements
from the dependent group to the labour force
(those who have come of working age and are
able and willing to work) and a movement
from the labour force to the dependent group
(the retirees).
2
 The concepts of Population and
Population growth
• Not only that, within labour market, there are
also movements from employed status to the
unemployed (due to retrenchment, quits) and
movements from the unemployed status to the
employed (due to recalls, new hires).
• Those who are unwilling to work can also
change their perception and enter the labour
market while those in the labour market can
decide to quit the labour market due to
cultural, social or health demands etc. 2
 The concepts of Population Census
• Population census is the main source of
population data and a vital aspect of
economic management because it provides
basic data since is the head-count of all the
persons residing in an area.
• A national population census is very vital for
economic planning because it affords a
nation or people the opportunity of knowing
the number of persons living in a particular
area and their respective vital information.
2
 The concepts of Population Census
• In conducting a population census, the head-
counts are usually classified according to sex,
age, occupation, religion, places of birth,
residence and origin, housing status and
nationality, amongst others.
• Countries usually conduct population census
at regular intervals, usually five or ten years.
• Tanzania, conducts her national population
census after every ten years and five Census
has been conducted since independence
(1967, 1978, 1988 2002 and 2012) 2
 Population census is of utmost importance
to every nation for the following reasons:
a) It enables a country to determine the size and
the rate at which its population is growing.
This helps to determine whether facilities
available for use are enough to take care of
people’s well-being and if not, the extent of
infrastructural provisions that will be provided
to take care of both the present and the
future demands in order to meet world
standards.
2
 Population census is of utmost importance
to every nation for the following reasons:
b) It provides information that can be used for
the distribution of a country’s scare resources.
For instance the allocation of revenue
amongst the central, federating states and the
local council areas of Nigeria is done on the
basis of the population census figure. Thus,
areas with higher population are expected to
receive larger shares of government revenues
and expenditures.
2
 Population census is of utmost importance
to every nation for the following reasons:
c) Country’s population figure aids in the formulation
of government policies especially when policies in
relation with the growth of the population as well
as both immigration into and emigration out of the
country. For instance, in the event of high
population growth rate caused by high fertility rate,
it is in the interest of the policy makers to make
policies aimed at birth control. In like manner, if the
pressure on a country’s resources is as a result of its
liberal immigration policy, policy makers can also
make laws to curb this menace. 2
 Population census is of utmost importance
to every nation for the following reasons:
d) A population census provides a country with
the opportunity of either posing as giants (as
in the case of Nigeria in the African continent)
or as receptors of foreign donations in the
form of aids and grants. A country with a very
large population often attracts international
aids in the events of environmental or
economic misfortunes.

2
 Population census is of utmost importance
to every nation for the following reasons:
e) The knowledge of a country’s population size
makes it easier for government to administer
effective governance. For instance, it is the
population size that assists in the division of a
country or a geographical location into small
units; (eg. regions, towns, districts, wards or
villages) the population figure also gives
directives on how to divide the country into
constituencies for electoral purposes.
2
 Population census is of utmost importance
to every nation for the following reasons:
d) The population of a country determines the
market potentials for goods and services. For
instance, a large population provides a large
market for goods and services and often
makes room for both internal and external
economics of scale; thus, a large population
increases a firm’s profitability. Thus its very
useful for a country to know the status of her
population.
2
 The Concept of Overpopulation
• A country is said to be overpopulated when the
population of the country exceeds the
resources available (land, technical know how
(Science and technology), labour force,
entrepreneurial capacity and physical capital)
of the country.
• In other words, the population of the country
exceeds the carrying capacity of that county,
that is; ability of her available resources to
sustain the current population without
confronting the future generation. 2
 The Concept of Overpopulation
• Causes of Overpopulation
a) Rapid rise (increase) in food production and
distribution.
b) Advancement in provision of portable water
and good sanitation practices.
c) Advancement in medical technology with
breakthroughs in vaccines and antibiotics
for former killer diseases.
d) Improvements in the quality of education
and standards of living within many
developing nations 2
 Problems associated with Overpopulation
a) Rise in poverty level and resource depletion:
Increasing incidence of poverty is one of the biggest
features of overpopulation. Over population puts
strains on existing resources of a country thereby
leading to resource depletion without
replenishment following the law of variable
proportion.
b) Increased health problems: Overpopulation leads
to overcrowding which motivates the fast spread of
contagious diseases and epidemics thereby causing
health problems and challenges for the people. The
death toll increase as the number of health people
2
in the workforce reduces.
 Problems associated with Overpopulation
c) Environmental pollution: Overpopulation is
often associated with increases in economic
activities of production. This often increases
the amount of waste generated in the course
of these production activities and these
wastes, often spilled into the environment,
bringing about environmental pollution which
is not only harmful to the human body but is
also harmful to all aquatic, atmospheric, and
terrestrial lives as well as to the earth itself.
2
 Problems associated with Overpopulation
d) Conflicts and wars: The strain put on the State
resources (especially in the less developed countries)
by overpopulation has often encouraged conflicts
over resources like water, land, forests, etc. This has
brought with it, a lot of tension between countries.
e) Rise in the unemployment and crime levels:
Overpopulation gives rise to increasing
unemployment rate as there are fewer jobs to
support large number of people. A rise in
unemployment further encourages higher crime level
as people will steal various items to feed their family
and provide themselves with basic amenities of life.
2
 Problems associated with Overpopulation
f) High Cost of Living: Since, difference between
demand and supply of both goods and
Services continues to expand due to
overpopulation, it raises the prices of various
commodities including food, shelter,
education, healthcare and other basic
necessities. This means that people have to
pay more in order to survive and feed their
families.
2
 How to control Overpopulation
• Some of the ways through which
overpopulation can be subdued includes the
engagement of the following measures;
a) Population control measures eg, Family
planning
b) Government policy and legislations
c) Improvements in educational services
d) Improvements in medical and health
services
e) Massive education and enlightenment on
sex education and parenting 2
 Factors that Influence Population Growth
• Factors determining the extent to which a population
of a country can grow includes;
a) Birth control: Encouraging birth control measures
leads to have manageable population than one in
which its citizens are involved in uncontrollable life
procreation.
b) Marriageable age: Countries with higher
marriageable age, the number of offsprings is often
fewer than in those with low ages
c) Improved health standards: Improved health
standards reduces mortality rates as well as
increasing birth rates, thereby maintaining a high
2

population level.
 Factors that Influence Population Growth
Factors determining the extent to which a population
of a country can grow includes; (Cont……)
d) Age and sex distribution in the population: A
country characterized by large number of labour
force (active population engaged in economic
activities) is bound to experience increasing
population growth compared to her counterpart.
In likewise manner, a country with large number
of women is bound to experience large increase
in its population due to higher fertility.

2
 Factors that Influence Population Growth
Factors determining the extent to which a population
of a country can grow includes; (Cont……)
e) Incidences of epidemics, wars, drought and
natural disasters: The Incidence of epidemics,
wars, and other natural disasters such as
drought, earthquakes, landslides and flooding
usually cause massive reduction in the
population of people. This is because of the
harsh conditions upon which these humans may
be subjected to.

2
Role of Population Growth on the Economy (Cont…)
• Economics distinguishes two categories of factor
inputs in production process; namely material
factor and human factor inputs.
• Material factor inputs consists of land and
capital, and human factor inputs are those
economic resources which are supplied by
human beings.
• It includes those who supply their labour skills
(labour) and those who supply their
entrepreneurial skills (entrepreneurs). These two
groups make up the labour force of any country.
2
Role of Population Growth on the Economy (Cont…)
• Material inputs cannot function efficiently in the
absence of the labour force effectiveness. For
instance, labour is needed to effectively utilize
material factor inputs effectively for efficiency in
output production while the entrepreneur is
needed to manage this effective combination for
utmost efficiency.
• Any population whose dependent group
outweighs its labour force is in danger because
the implication is that they producers of national
output is less in number than those who 2

contribute nothing to economic growth.

Role of Population Growth on the Economy (Cont….)
• Healthy population is a positive determinant of
economic growth because it propels an increase in
size of the domestic market for goods and services;
it makes for better division of labour, and increases
the possibility of efficiency in productivity by
improving the ratio of labour force to population.
• It further enhances the country’s political as well as
martial prowess. It encourages the diversification
of demands for commodities and encourages
increasing returns to scale and by so doing, raises
the rate of economic activities in such a country.
2
Role of Population Growth on the Economy (Cont…..)
• This implies that, healthy population is ideal for
any economy in pursuant of its growth policy
because it ensures that the act of production is
followed up by the act of consumption; this is
very necessary in order to ensure the sustainable
growth of the nation’s gross output.
• However, when the growth rate of the population
is rather explosive, expected gains from
population increases vanishes, because
overpopulation results to increasing incidences of
unemployment since the available job 2

opportunities are fewer than the job seekers.

The End
2
 The Concept of Poverty
• The earliest definitions of poverty centered on
the inability to obtain adequate food and other
basic necessities of a person.
• Currently, the main focus continues to be on
material deprivations, i.e., the failure to
command private resources
• Poverty is also conceptualized as a condition in
which a person does not have the ability to
satisfy his basic needs like food, shelter, clothing
and means of movement from one geographical
location to another. 2
The Concept of Poverty (Cont…)
• It is measured in two categories:
• Absolute poverty which is a situation when
someone is unable to acquire adequate
resources in a bid to attain a minimum level of
basic needs for life sustenance
• Relative poverty which is inability by someone
to attain a specific level of living as specified by
the government or any other policy.
• Relative poverty is comparative; as it varies
from one area to another and can be eradicated
through effective income redistributive policies
2

to address inequality of any kind.

The Concept of Poverty (Cont….)
• When measuring relative poverty, Poverty is
defined as situation of being below a certain
threshold which is computed from within the
population of interest.
• Thus, someone who is “relatively impoverished”
(poor) has significantly less wealth than other
members of the given society.
• For example, a common practice is to define
someone as poor if his or her income is less
than 60% of the population’s median income.
2
The Concept of Poverty (Cont….)
• This concept is sometimes called “economic
distance.” The advantage to this approach is that it
ensures that poverty is understood in the context
of its specific community.
• Its demerit is that, regardless of actual levels of
wealth, a relative measure necessitates that at
least some members of the community are
defined as impoverished.
• For example, even in a nation of millionaires, it
would be mathematical necessity that some
millionaires will be poor, since their income is less
2

than 60% of the median.

The Concept of Poverty (Cont…)
• Absolute poverty, on the other hand, is a level
of poverty defined in terms of the minimal
requirements necessary to afford a basic
standard of living (living a decent life).
• Inability to achieve that minimal standard is
considered to be experiencing deprivation and
therefore referred as poverty.
• To compute absolute poverty, we have to
define a set of necessities that we place in our
grocery basket which is also called “market
basket measure” (MBM). 2
 The Global Poverty Line (GPL)
• This is Perhaps the most commonly applied
poverty threshold, used since 1990, which is
delineated by the World Bank.
• The line is based solely on the cost of living, and is
assessed by computing the global prices of key
commodities. Up until 2008, the GPL was
conveniently defined as one U.S. dollar per day.
• Anyone making less than this amount was said to
be unable to purchase the necessities of life and
was thus impoverished. In 2015, due to global
changes in commodity prices, that line was 2

redefined as $1.90 per day

 Human Poverty Index (HPI)
• Since 1997 until fairly recently, the United
Nations relied upon an indicator called the
Human Poverty Index (HPI).
• This is a mathematical combination of scores
describing the given population’s longevity,
literacy, and standard of living.
• However, the formula for calculating the HPI
differs among poor and wealthy countries.

2
 Human Poverty Index (HPI)
• For poor countries (most of Developing
countries), less longevity is expected, while the
standard of living is based on very basic
conditions, such as whether treated water is
available or not and whether children tend to
be underweight. Thus, these factors are also
considered during calculations.
• For wealthy countries, the formula includes
among other things, measure of social
exclusion, which is typically estimated from the
nation’s unemployment rate. 2
Multidimensional Poverty Index(MPI)
• There are ongoing efforts to produce more
comprehensive and thorough poverty estimators.
• Among the more impactful of recent innovations is
the Multidimensional Poverty Index (MPI), which
was developed in 2010 by the Oxford Poverty &
Human Development Initiative, and which has
replaced the HPI in most serious international
comparisons of poverty.
• The MPI is intended to measure acute poverty in
terms of both the proportion of people who are
experiencing multiple deprivations and the intensity
2

of such deprivations.
Multidimensional Poverty Index(MPI) Cont…
• It does so by measuring individuals’ experiences
with health, education, and standard of living (via
traditional development indicators, like the
availability of clean drinking water, whether the
home has a proper floor), and summing those
experiences across the measured population.
• The MPI is usually computed for low income
countries only . In 2016, computations were
completed for 102 countries, which accounted
for about 75% of the total human population.
2
Multidimensional Poverty Index(MPI) Cont…
• The MPI looks beyond income to understand
how people experience poverty in multiple
and simultaneous ways.
• It identifies how people are being left behind
across three key dimensions; which are
Health, Education and Standard of living,
comprising 10 indicators.
• People who experience deprivation in at least
one third of these weighted indicators fall into
the category of multidimensionally poor.
2
MPI: Dimensions, Indicators, Deprivation
cutoffs, and weights
Dimensions of Deprived if living in the household
Indicator Weight
Poverty where…
An adult under 70 years of age or a
Nutrition 1/6
child is undernourished.
Health Any child under the age of 18 years
Child
mortality
has died in the five years preceding 1/6
the survey.
No household member aged 10 years
Years of
schooling
or older has completed six years of 1/6
schooling.
Education
Any school-aged child is not
School
attendance
attending school up to the age at 1/6
2
which he/she would complete class 8.
MPI: Dimensions, Indicators, Deprivation cutoffs, and weights (Cont…)
Dimensions of Poverty Indicator Deprived if living in the household where… Weight
The household cooks with dung, wood, charcoal or
Cooking Fuel 1/18
coal.
The household’s sanitation facility is not improved
Sanitation (according to SDG guidelines) or it is improved but 1/18
shared with other households.
The household does not have access to improved
drinking water (according to SDG guidelines) or safe
Drinking Water 1/18
drinking water is at least a 30-minute walk from
Standard of home, round trip.
living Electricity The household has no electricity. 1/18
Housing materials for at least one of roof, walls and
floor are inadequate: the floor is of natural materials
Housing 1/18
and/or the roof and/or walls are of natural or
rudimentary materials.
The household does not own more than one of
these assets: radio, TV, telephone, computer, animal
Assets
2
1/18
cart, bicycle, motorbike or refrigerator, and does not
own a car or truck.
The Multidimensional Poverty Index (Cont…)
• Basically, we have multitude of methods for
measuring financial distress, each rife with its
own strengths, biases and values.
• The challenges remain on;
• Do we only care about whether a poor person
survives, or do we also care whether he thrives?
• Are food and shelter the only baseline
requirements, or should we include access to
services such as health, legal, financial, or even
access to information and electronic
2
connectivity?
The Multidimensional Poverty Index (Cont…)
• Also, the challenge when discussing low-income
and deprivation arises during the selection of the
most appropriate measure for the story being
told, and avoiding comparing computations that
were derived from dissimilar assumptions,
values, and intents.
• However, despite of its challenges, MPI
method is a bit more inclusive than other
methods, since it accounts for impoverishing
factors beyond the cost of goods. 2
 The Occurrence of Poverty
• The occurrences of poverty can come in a
number of ways as follows; -
a) Poor access to basic infrastructures: When people
do not have access to basic infrastructure like
electricity, portable water, and good roads, their
potentials are limited and this can bring hindrances
to meet their basic life requirements.
b) Overpopulation: Overpopulation as well as
population explosion raises the need for
consumption thus making it less imperative to
accumulate capital. 2
The Occurrence of Poverty (Cont…)
• The occurrences of poverty can come in a
number of ways as follows; -
c) Unequal distribution of resources: Inequality
anywhere is inequality everywhere. When
people are denied access to certain resources,
it limits their productive abilities thereby
restraining them to a life of poverty.
d) High cost of living: A high cost of living erodes
people’s purchasing powers thereby restraining
their production as well as spending powers.
2
The Occurrence of Poverty (Cont…)
• The occurrences of poverty can come in a
number of ways as follows; -
e) Lack of means of sustenance: Poor access to
the basic needs of life: good food, portable
water, good sanitation, good shelter, etc, are all
evidences of poverty.
f) Low level of productivity: A person who does
not work hard enough will definitely not have
enough resources with which to meet his basic
needs and requirements for a healthy life. 2
The Occurrence of Poverty (Cont…)
• The occurrences of poverty can come in a number
of ways as follows; -
g) Poor access to educational and health services:
Human capital development is basically achieved through
good education and health system, because they contribute
significantly towards equipping individuals with the right
skills, knowledge and information as well as the right
disposition, physical and mental attitudes with which/how
to approach life struggles and hence contributing positively
towards the development of his immediate community. The
absence of good educational and health facilities endangers
human capital accumulation and makes both the individual
and the nation at large, susceptible to deficiency and lack.
2
The Occurrence of Poverty (Cont…)
• The occurrences of poverty can come in a number of
ways as follows; -
h) Low level of income and poor access credit facilities: Low
income level and inaccessibility to credit facilities, just as
in the case of poor access to other resources, limits a
person’s command for goods and services and leaves him
quite susceptible to poverty.
i) Low level of savings and investment: A person who
consumes more than he saves will definitely have little or
nothing left to invest hence there would be no capital
formation. In the absence of capital formation, a people
rather become consumptionist other than productionist
and thus, swells the vicious cycle of poverty. 2
The Concept of Poverty (Cont…)
• The incidence of poverty is reflected in a model of vicious
cycle of poverty illustrated in Figure below

2
The End
2
 Assignment 1
Population growth, Economic growth and Poverty
are interrelated concepts to each other, however
different in context. With specific examples from
Tanzanian contexts, substantiate this statement.
NOTE;-
1. 3 – 4 Pages excluding cover page and References
2. Font size; 12, Font type Times New Roman, Margin 2.5
cm (top & left) and 2.0 cm (bottom & right)
3. Individual work
4. Submission date; 11th May, 2021 before 1500Hrs
5. Copying and pasting from Internet sources is highly
discouraged, 2
 Study Questions
1. a). Define the term Population. b). Briefly, explain
major factors that influences population of a given
area/country
2. Population and poverty are inseparable. Discuss
3. Explain the linkage between population growth and
the growth of an economy at whether household or
national level
4. Distinguish between Absolute and Relative poverty by
providing strengths and weaknesses for each measure
5. Describe the concepts of labor force and labor market
by giving an account on how they contribute towards
poverty or poverty reduction 2
2
 Population and Poverty linkages
• High population is a great potential for a country as it adds
more hands in production process and increases market
for finished goods.
• Economic growth can also be driven by population growth,
where population acts as a workforce that can supply the
labor market.
• Malthus also, states that the population tends to increase
according to a series of measurements, while the
production of food (natural resources) tends to increase
according to a series of counts.
• Thus, Population growth that continues to increase and is
not accompanied by an increase in production or number
2
of natural resources will cause poverty.
Population and Poverty linkages (cont..)
• The human capital theory states that the higher
the level of education, the greater the income
earned by respective individual (Todaro and Smith, 2011).
• Also, workforce with higher education will have
high productivity in producing goods and services
hence contributing more in the labor market.
• High productivity will be followed by high income
and high income increases people's purchasing
power so that their basic needs can be met.
• Thus the community will be able to avoid poverty
incidences, and vice versa. 2
Population and Poverty linkages (cont..)
• Population growth that continues to increase
uncontrollably tend to deplete natural resources.
• This may be resulted in the emergence of hunger,
disease, and other human sufferings, hence
creating poverty because labor did not work
optimally, due to the mismatch between education
and the work undertaken.
• This is because, number of people entering the job
market is very large so it forces job seekers to get
work as soon as possible even though it is not
under their educational background. 2
Population and Poverty linkages (cont..)
• Therefore, we can conclude that; -
• The population influences both positively and
significantly towards poverty occurrence.
• The Education status among given population
affects negatively and significantly to poverty.
• The number of people (population size) and
their education status has also positive and
significant impact on poverty

2
 The Malthusian Theory of Population
• The Malthusian theory of population was credited
by Thomas Malthus, a British reverend, economist,
demographer gentleman whose work on population
theory was published in “an easy on the principles
of population” in 1778.
• His major argument was that, the world population
were increasing in geometric progression, while
land, which was in a fixed quantity, produced food
which increased only in arithmetic progression.

2
The Malthusian Theory of Population (cont..)
• He therefore theorized that a time would come
when the human population gets up to the limit
whereby the available food supply can be enough
for sustenance and any further increase in
population will have a reversal effect.
• There would be a forced population decrease
through natural phenomena like famine, drought,
diseases, etc, since the land has already been
stretched up to and above its limit of production
capacity.
2
The Malthusian Theory of Population (cont..)
• Malthus’ theory stood on the assumption that
the power of population growth would be
continually greater than the power of the earth
to provide the basic substance (necessities) of life
especially; food.
• Thus, according to Malthus, passion between the
man and women is an anticipated phenomena
and when this goes on unchecked, population is
bound to grow at an uncontrollable rate such
that it would exceed food production.
2
The Malthusian Theory of Population (cont..)
• Famine, drought, and diseases are expected to
set in because these are nature’s own way of
returning itself to an equilibrium state.
• However, Malthus’ predictions concerning some
misery to be faced by man-kind was criticized
since they never happen irrespective of the
evident growth in the present world population.
• People’s living standards have risen greatly and
stand much above the minimum subsistence
level, probably because of the following; -
2
The Malthusian Theory of Population (cont..)
a) Rapid improvement in farming techniques:
Population has not increased as rapidly as
predicted by Malthus. Conversely, food
production has increased tremendously
because of the rapid advances in technology.
As a result, the people’s living standards all
over the world have risen instead of falling
as was predicted by Malthus.

2
The Malthusian Theory of Population (cont..)
b) Improvements in technology: Malthus’
thesis maintained that food production
would not keep pace with the growth in
population owing to the operation of the law
of diminishing returns in agriculture. But by
making rapid advances in technology and
accumulating capital in larger quantity,
advanced countries have been able to
postpone the stage of diminishing returns.
2
The Malthusian Theory of Population (cont..)
c) Opening up of new lands: the migration
from Europe to the New World (the
Americas) as well as to Africa and Australia
made it possible for people to produce more
food from more fertile land. This invalidated
Malthus thesis that land was fixed

2
The Malthusian Theory of Population (cont..)
d) Improvements in transportation facilities:
As at the time of his predictions, there was
limited means of transportation but
presently, improvements in the means of
transportation (for instance, the invention of
the railway, cargo aircrafts and cargo ships)
have made food and raw materials more
accessible leading to increase in world trade
as well as improvements in consumption
habit and inevitably, high living standards.
2
The Malthusian Theory of Population (cont..)
e) Advances in medical sciences: The
improvements in the science of medicine
ensured reduction in epidemics and diseases
which would have lead to decline in the
world population. It has also ensured that
people have adequate medical attention in
addition to having access to some medicine
which is supplements to natural food.

2
The Malthusian Theory of Population (cont..)
f) Reduction in family size: The Malthusian
theory was not validated throughout the
world and most especially in Europe and
other advanced nations were family size
control policies became popular and
fashionable. This was rather intentional
rather than as a result of the fear raised by
the Malthusian theory.

2
 OTHER THEORIES IN POVERTY
• The term “theory,” simply refers to a general
framework with core principles and concepts
that enables; -
i. predictions and specific testable implications
across a range of settings and/or
ii. explanation of specific cases.
• The most useful theories are accompanied by
research programs that explain an expanding
set of cases and are able to reconcile
anomalous cases without abandoning core
principles. 2
 OTHER THEORIES IN POVERTY
• Ideally, theories of poverty;
• are exportable outside initial cases or
samples,
• have both internal and external validity,
• are fruitful and generate subsequent
research, and
• They are clear.
• Concretely, a theory should explain why some
are poor and others are not, and why poverty
is greater in one setting than another.2
 OTHER THEORIES IN POVERTY (cont..)
• Explanations of the causes of poverty can be
classified into three broad families of theories;
Behavioral, Structural and Political.
a) Behavioral theories focuses on individual
behaviors as driven by incentives and culture.
b) Structural theories emphasize the demographic
and labor market context, which causes behavior
and poverty.
c) Political theories contends that power and
institutions cause or create policy (ies), which
causes poverty and moderates the relationship
2
between behavior and poverty.
 OTHER THEORIES IN POVERTY (cont..)
• Conceptual models of causal relationships in
behavioral, structural and political theories of poverty

2
BEHAVIORAL THEORIES IN POVERTY
a) Behavioral Theories
• These are theories, which considers behavior as a key
mechanism directly causing poverty
• Thus, the poor are poor because they engage in
counterproductive, poverty-increasing behavior or
risks like unemployment and the like.
• Poverty is high in this context because there is a high
prevalence of those with demographic characteristics
indicating such behaviors.
• According to behavioralists, racial disparities in
poverty result from a disproportionate amount of
problematic behavior among racial minorities. 2
BEHAVIORAL THEORIES IN POVERTY (cont..)
• To reduce poverty, behavioralists suggests to
reduce the prevalence of people engaging in such
behaviors
• Reflecting behavioral theory, many use individual-
level data sets to study low-income mothers and
fathers and investigate why they conceive children
out of wedlock and do not get married
• Consistent with behavioral theories, risks like
single motherhood, low education, and
unemployment are significantly associated with
poverty in many settings 2
BEHAVIORAL THEORIES IN POVERTY (cont..)
• Major versions of behavioral theories tend to
present incentives and culture as the principal
sources of behavior (Bertrand et al. 2004, Durlauf 2011).
• By incentives, scholars emphasize rational
responses of goal-oriented individuals that result
in problematic behavior.
• By culture, the focus has been on schemas and
repertoires that guide the poor’s behavior.
• The literature on behavioral causes of poverty also
often allows for interactions between incentives
and culture. 2
BEHAVIORAL THEORIES IN POVERTY (cont..)
• With respect to developing countries, there has
been much less interest in whether generous social
policies encourage moral hazards.
• Scholars typically focus on how market inefficiencies
and controversial policies disincentivize poor people
from investing in productive activities.
• For instance, because market inefficiencies
discourage the poor from investing in insurance
(Banerjee & Duflo 2011), adverse life events like
accidents are more strongly associated with
descents into poverty (Krishna 2011). 2
BEHAVIORAL THEORIES IN POVERTY (cont..)
• Behavioralists also explore how poverty reciprocally
feeds back into behaviors reproducing poverty intra-
and intergenerationally.
• Poverty imposes cognitive burden, present bias, and
stress, which then encourage poverty-perpetuating
behavior, such as lower educational.
• Also, poverty undermines children’s cognitive ability
and development which undermines education and
leads to adult poverty.
• Often these feedbacks result from poverty causing
problematic incentives or culture (Dahl et al. 2014).
2
BEHAVIORAL THEORIES IN POVERTY (cont..)
• Theory of poverty traps is an argument that poverty
creates bad incentives that undermine motivations
for and returns to investments that could reduce
subsequent poverty, such as education or insurance.
• For example, there is a poverty trap if moderate
investments in education shall cause an opportunity
cost of lower earnings and poverty only declines
with unfeasibly high investments in education.
• Scholars argue that culture is a response to poverty,
which then discourages education, employment,
and marriage of the poor or encourages welfare 2

dependency or out of wedlock births.

BEHAVIORAL THEORIES IN POVERTY (cont..)
• Despite its contributions, this theory faces several
challenges/criticisms as follows; -
a) Behavioral explanations are rarely compared
against the evidence for any alternative theory.
There is mere demonstrations that culture,
incentives, and or behavior matter, but no rival
explanation is considered. Also few even compare
incentives against culture as causes of poverty-
increasing behavior.
b) Although behavioral theories often feature strong
causal claims, there remains tremendous 2

uncertainty about causality (Streib et al. 2016).

BEHAVIORAL THEORIES IN POVERTY (cont..)
• Despite its contributions, this theory faces several
challenges/criticisms as follows; -
b) Although behavioral theories often feature strong
causal claims, but remains tremendously uncertainty
about causality. Scholars routinely fallaciously imply
that describing “who is poor” provides an explanation
of the causes of poverty. Indeed, behavioral theories
are unclear about whether their arguments are even
intended to be causal, since “Rather than causing
behavior, frames make it possible or likely,” even
though there is no real difference between “cause”
2
and “make possible or likely.”
BEHAVIORAL THEORIES IN POVERTY (cont..)
• Despite its contributions, this theory faces several
challenges/criticisms as follows; -
c) The relationship between behaviors and poverty is quite
unreliable. For example, although single motherhood has
been the most widely studied risk of poverty, Brady and
colleagues (2017) showed that single motherhood is not even
significantly associated with poverty. Also, among children in
low-income families, there is no disadvantage in upward
mobility associated with single parenthood. Although many
presume unemployment and single motherhood cause child
poverty in the United States, Baker (2015) demonstrates that
poverty’s association with employment has increased
dramatically while its association with marriage has declined
2

dramatically since the 1970s

BEHACIORAL THEORIES IN POVERTY (cont..)
• Despite its contributions, this theory faces several
challenges/criticisms as follows; -
d) Behavioralists also failed to explain macro-level
variation in poverty. The cross-national
prevalence of risks cannot explain cross-national
variation in poverty (Brady et al. 2017). One
reason behavior explanations have been so
prominent despite these limitations is that much
of the research linking behavior to poverty has
been done in the United States or unique settings
with weak welfare states (Ku et al. 2018). 2
BEHACIORAL THEORIES IN POVERTY (cont..)
• Despite its contributions, this theory faces several
challenges/criticisms as follows; -
e) Rapidly growing international literature contradicts claims
that generous social policies incentivize poverty-increasing
behavior. For instance, Banerjee et al. (2017) analyze seven
random control trials across less developed countries and find
no effects of conditional or unconditional cash transfers on
employment. The claim that generous social policies
incentivize poverty-increasing behavior has been central to
behavioral theories for a very long time, because disincentives
have been the key reason behavioralists caution against
generous social policies and instead advocate for behavior
change. In turn, this evidence fundamentally challenges 2
a
core principle of behavioral theories.
STRUCTURAL THEORIES IN POVERTY (cont..)
• In these theories of poverty, “structure” refers to
macro- and meso-level demographic and economic
contexts representing available opportunities and
constraints. These theories focuses on how
demographic and economic contexts cause poverty
through three channels.
a) indirectly, structural contexts cause problematic
behavior, which causes poverty.
b) these structures directly cause poverty, even net of
behavior.
c) structural contexts interact with behavior to
moderate the behavior-poverty relationship. 2
STRUCTURAL THEORIES IN POVERTY (cont..)
• Hence, structuralists differ from behavioralists because
economic and demographic contexts do not solely operate
through behavior. Also, structuralists tend to highlight the
contextual effects of demographic or economic structures
while behavioralists tend to focus on demographic/economic
composition.
• For example, racial disparities in poverty are caused by
differential exposure to deleterious structural contexts.
Economic contexts includes economic growth and
development, industrialization and deindustrialization, and
spatial and skills mismatches, while Demographic contexts
includes neighborhood disadvantage, age/sex composition,
residential segregation, urbanization, and demographic
2

transitions.
STRUCTURAL THEORIES IN POVERTY (cont..)
• Structural theories have long history and may be the
most subscribed to class of theories in sociology. These
theories partly originate from scholars like Clark (1965),
when explaining deep-seated racial inequalities in US.
• Other scholars like Harrington (1981) and Galbraith
(1998) stressed how economic growth was not helping,
and often was displacing, the poor. Structural theories
gained momentum as scholars sought to explain
concentrated inner-city poverty in the 1980s. These
literatures parallel longstanding interest in the benefits
of economic development for poor countries, as well as
literatures on labor market segmentation as wall as rural
2
and suburban poverty.
STRUCTURAL THEORIES IN POVERTY (cont..)
• Structuralists are presently confronting at least
three challenges/criticisms as follows; -
a) Structural theories highlights contextual effects
more than behavioralists relating to poverty, and
remains quite to explain on behavior. Independent
variables in many studies are structural change and
dependent variables are behavior presumed to
cause poverty. Therefore, the challenges facing
behavioralists also apply here. Rather than
presuming behaviors cause poverty, the literature
needs to demonstrate that structure causes 2

behavior and behavior causes poverty.

STRUCTURAL THEORIES IN POVERTY (cont..)
• Structuralists are presently confronting at least three
challenges/criticisms as follows; -
b) Behavioralists claim to view structure as the
underlying cause of poverty, or claim culture is a
mechanism between structure and behavior where as
ethnographies preview a structural theory in the
introduction, but then do not actually analyze
structural variation, or exclusively concentrate on
individual-level behavior. There is a misalignment
between the professed structural theory and what
the research design can leverage. As a result, there is
a misallocation of attention in the field away from
2

actual structural explanations.

STRUCTURAL THEORIES IN POVERTY (cont..)
• Structuralists are presently confronting at least three
challenges/criticisms as follows; -
c) The effects of structures appear to vary across time
and place. For example, it is well known that
economic development reduces poverty mostly in
less developed countries. Nevertheless, the benefits
of economic development have diminished in recent
decades. Similarly, there are large, stable differences
in poverty across rich democracies even though all
experienced similar structural changes such as
deindustrialization and rising female labor force
2
participation.
STRUCTURAL THEORIES IN POVERTY (cont..)
• These theories contends that poverty is a political
outcome driven by power relations over and
collective choices about how to distribute
resources (for a review of political theories, see Brady et al. 2016).
• Political theories explains that power and
institutions cause policy, which causes poverty and
moderates the behavior-poverty link.
• Power and institutions reinforce each other, and
institutions also directly shape poverty and
moderate the behavior-poverty link.
• Arguably, the most influential political explanation 2

is power resources theory

STRUCTURAL THEORIES IN POVERTY (cont..)
• Power resources theory contends that collective
political actors mobilize less advantaged classes
around shared interests and ideology. Such groups
then form labor unions, elect Left parties, and expand
the welfare state.
• The mobilization of less advantaged groups is pivotal
because the default distribution of political power in
a capitalist democracy favors elites and business and
this default power advantage leads to a default high
level of inequality.
• Hence, it is essential for the working class and poor to
bond together and attract some of the middle class to
2

gain any real political power.

STRUCTURAL THEORIES IN POVERTY (cont..)
• Power resources theory is often used to explain why
some welfare states are more generous than others.
• However, power resources theory is actually a
broader theory of the income distribution, with the
welfare state as a principal mechanism.
• Power resources theory has evolved over time and
has become more focused on institutionalized power
(e.g., electoral systems, stable democracy) than its
earlier versions.
• Poverty is lower in rich democracies where Left
parties have controlled government, unionization is
higher, and women are a greater share of parliaments
2
STRUCTURAL THEORIES IN POVERTY (cont..)
• Other influential political explanation focuses on how
institutions, are like such as regulations and laws, govern
the distribution of economic resources. Literatures
highlights that poverty rates are stable and slow-moving
and do not quickly respond to elections and changes in
power. There is considerable path dependency to
poverty, and to understand the institutional sources, we
need a long time horizon of causes and effects.
Institutions reflect the residue of the power of collective
actors in the past, and continue to be consequential even
without active maintenance by collective actors. For
instance, historical institutions like slavery and
2
federalism
STRUCTURAL THEORIES IN POVERTY (cont..)
• Within political literatures on poverty, there is a
central role for state policies. Brady and colleagues
(2016) listed the generic mechanisms for how
states shape poverty as follows; -
a) organizing the distribution of resources (e.g., taxes and transfers,
often called redistribution),
b) insuring against risks,
c) investing in capabilities (e.g., early childhood education and
health services),
d) allocating opportunities (e.g., public employment),
e) socializing normative expectations, and
f) disciplining the poor. State policies also matter to racial
inequalities in poverty because of both differential access to and
differential effects of social policies 2
STRUCTURAL THEORIES IN POVERTY (cont..)
• There are several emerging developments on the
welfare state such as follows;-
• First, there is growing interest in how welfare
generosity entails both
a) formally legislated coverage, replacement rates,
and eligibility criteria and
b) “takeup,” access and barriers to programs and
services.
• Second, scholars study dimensions of social policies,
such as targeting and universalism.
• Third, moving beyond rich democracies, there is
growing interest in social policy and poverty in
2

developing countries.
STRUCTURAL THEORIES IN POVERTY (cont..)
• Fourth, how social policies moderate the behavior-
poverty link.
• Therefore, the relationships between poverty and
behaviors like single motherhood are significantly
weaker in generous welfare states (Rothwell &
McEwen 2017).
• Such risks are penalized more severely in weak
welfare states like the United States and
uncorrelated with poverty in generous welfare
states like Denmark (Brady et al. 2017).
2
The End
2
 MEASUREMENT OF POVERTY
• The basic needs approach
• This is used to measure absolute poverty in
many countries, including Tanzania
Mainland.
• It attempts to define the minimum
resources necessary for long-term physical
wellbeing in terms of consumption of
goods.
• The amount of income required to satisfy
2

those needs is then called Poverty lines.

MEASUREMENT OF POVERTY (Cont…)
• The food poverty line
• This is the level at which households total
spending is used to meet their needs for food.
Food poverty is inability to acquire or
consume an adequate or sufficient quantity
of food in socially acceptable ways, or the
uncertainty that one will be able to do so'
• It is also often referred to as the extreme poverty
line. Individuals who fall below this level are
classified as extremely poor.
2
 POVERTY INDECES
• An Index (Indices for many) refers to a
sign or measure of something
• The most widely used poverty indices
are the percentage of the poor below
a poverty line (headcount index), the
aggregated poverty gap (poverty gap
index), and an aggregate (average) of
individual squared gap index (poverty
2

severity index).
 POVERTY INDECES (Cont….)
• Poverty measure itself is a statistical
function that translates the comparison
of the indicator of household well-being
and the chosen poverty line into one
aggregate number for the population as a
whole or a population subgroup.
• Many alternative measures exist, but the
three measures described below are the
ones most commonly used. 2
 POVERTY INDECES (Cont….)
1. Incidence of Poverty (headcount index)
The Incidence of Poverty or commonly
known as the headcount index or rate is
the share of the population whose
income or consumption is below the
poverty line; that is, the share of the
population that cannot afford to buy a
basic basket of goods.
2
 POVERTY INDECES (Cont….)
• There are two types of poverty namely;
the Basic Needs Poverty which is an
aggregation measure of poverty that
takes into account both the food and
non-food requirements, and
• Food Poverty which refers to aggregation
of daily food consumption.

2
 POVERTY INDECES (Cont….)
2. Poverty Gap Index (PGI) or Depth of
Poverty. The Poverty Gap Index (PGI) is a
measure which shows the extent (how
far) households are from the poverty
line. PGI measures the average poverty
gap in the population as a proportion of
the poverty line. This measure captures
the mean aggregate consumption
shortfall relative to the poverty line
2

across the whole population.

 POVERTY INDECES (Cont….)
• Poverty Gap Index is obtained by adding
up all the shortfalls of the poor
(assuming that the non-poor have a
shortfall of zero) and dividing the total by
the population.
• In other words, it estimates the total
resources needed to bring all the poor to
the level of the poverty line.
2
 POVERTY INDECES (Cont….)
3. Squared Poverty Gap Index (SPGI) or
Severity Poverty Index (SPI). This is the
measures the distance separating the poor
from the poverty line (the poverty gap), as
well as the inequality among the poor. A
higher weight is placed on those households
that are far away from the poverty line. Most
Household Budget Surveys and poverty
reports in many countries use all the three
poverty indices above to describe poverty.
2
How Poverty is Measured in TZ
• Tanzania, measures poverty by comparing
household’s consumption per adult
equivalent to the national poverty line using
Household Budget Survey (HBS) data.
• The consumption aggregate comprises food,
including food produced by the households
themselves, and expenditures on a range of
other goods and services (e.g., clothing,
utilities, transportation, communication,
health, and education). 2
How Poverty is Measured in TZ (Cont…)
• It excludes rent and other housing-related
expenditures as well as spending on
exceptional events (e.g., marriages,
funerals) and larger consumer durable
items (such as cars, TVs, etc.).

2
How Poverty is Measured in TZ (Cont….)
• The food poverty line is the monetary
value of minimum food bundle or basket
containing 2,200 kilocalories per adult
per day for one month, based on the
food consumed by 10 to 50 percent of
the population.
• The daily cost of the food poverty line is
TZS 1,109.53 per adult equivalent or TZS
33,748 per adult per month in 2018 HBS.
2
How Poverty is Measured in TZ (Cont…)
• This is based on the 251 most common
food items consumed in Tanzania.
• The basic needs poverty line adds an
allowance for basic non-food necessities
to the food poverty line such as clothes,
transportation, education, health, e.t.c
(TZS 49,320 per adult per month).

2
How Poverty is Measured in TZ (Cont…)
• The four poverty measures commonly
used to assess poverty in Tanzania are:
1. The basic needs poverty (headcount
poverty rate) which measures the
proportion of the population whose
monthly consumption per adult
equivalent is below the basic needs
poverty line.
2
How Poverty is Measured in TZ (Cont…)
• The four poverty measures commonly
used to assess poverty in Tanzania are:
2. The food poverty (extreme headcount
poverty rate) which measures the
proportion of the population living
below the food poverty line.
3. The depth of poverty (poverty gap)
which indicates how far, on average,
poor households are from the poverty
2

line.
How Poverty is Measured in TZ (Cont…)
• The four poverty measures commonly
used to assess poverty in Tanzania are:
• Poverty gap or the depth of poverty
Captures the mean consumption shortfall
relative to the poverty line across the
whole population, and it is measured as
the sum of the consumption deficit from
the poverty line for the poor (the nonpoor
have a shortfall of zero) divided by the total
2
population.
How Poverty is Measured in TZ (Cont…)
• The four poverty measures commonly
used to assess poverty in Tanzania are:
• The depth of poverty also shows the total
resources needed per adult equivalent to
eliminate poverty, assuming that all poor
individuals have exactly the same
shortfall between their consumption and
the poverty line.
2
How Poverty is Measured in TZ (Cont…)
• The four poverty measures commonly
used to assess poverty in Tanzania are:
4. The severity of poverty (the squared
poverty gap) which captures both the
extent or how far the poor are from the
poverty line and consumption inequality
among the poor.

2
The End
2
 Poverty Profile Construction
• To construct a poverty Profile, three major
decisions has to be taken. They include;-
i. Choosing the criteria for ranking the households
ii. Choosing a poverty line (amount of income or
expenditure necessary to support a person at
subsistence level of food and other basic needs)
iii. Selecting a poverty Index for measuring the
poverty
• Economic theories suggests the use of goods
and services to measure household welfare
2
 Poverty Profile Construction (Cont…)
• Measures of welfare, includes the value of
home-produced consumption
• For example, food consumption is valued in
terms of the ; -
i. Food bought from market places and meals
purchased for consumption at or away from
home,
ii. Food produced at home,
iii. Food items received as gifts or remittances from
other households
iv. Food received from employers as payment in-
2

kind for services rendered

 Poverty Profile Construction (Cont…)
• For housing, consumption value includes
valuation of how much one would have to pay for
a house similar to hers/his, given the current
market conditions. Merits guiding this choice
includes the following; -
i. Availability of consumption smoothing
opportunities as income of the poor is very
unstable
ii. Consumption is likely to involve a higher degree of
accuracy in its measurements than income
iii. Utility and well-being depend on consumption,
2
not on income
 Poverty Profile Construction (Cont…)
• Having chosen consumption (as proxied by total
expenditures) as an indicator of household welfare,
there is still question of adjusting for household size
and composition.
• Households with different sizes and composition have
different needs; for example, children and adult’s
nutritional needs differ; e.g. to cook a meal for two
persons requires a similar amount of energy as
cooking a meal for one person (economies of scale)
• Thus, differences in family composition (age, sex and
family size) are accounted for by estimating the
number of adult equivalents as illustrated in the2

following table 8H.2

Poverty Profile Construction (Cont…)

2
 Poverty Profile Construction (Cont…)
• The household equivalence scale are usually used to deflate
household expenditures
• Adult equivalent (AE) expenditure can then be used to rank
households in welfare. For example, Household A and B
with the same annual expenditure (say Tsh 70000) and
different sizes; Family A is composed of 2 adults and 2
children (say 3.5 AE) and Family B composed of 4 adults (say
3.9 AE)
• Because their different amount of needs, family A is better-
off than B, because its AE expenditure is higher that B
(20,000 and 17,949 respectively)
• If we compare the level of income per capita, we would
have concluded that both have the same level of welfare
2
 Traditional measures of Poverty
• Traditional measures of poverty uses Poverty Lines.
A poverty line is determined in one of the following
ways; -
1. Cost of Basic needs method
• In this method, poverty line is calculated basing
on the cost needed to obtain a basic diet for main
age, gender and activity groups and then
multiplying that cost by a factor to provide for
other necessities. For example, if the spend about
71% of their income on food, a factor of 1.41
(100/71) is multiplied by the income needed for
food among the poor to get the poverty line 2
 Traditional measures of Poverty
2. Food Energy Method
• In this method, poverty line is set at the
consumption expenditure level at which an adult
person’s average dietary energy intake is exactly
sufficient to meet dietary food energy
requirement
3. Food Share Method
• In this method, poverty line is derived from the cost
of consumption plan needed to acquire just
sufficient nutrients. If this happens to be a third of
total plan consumption, the poverty line is set at
three times the cost. 2
 Traditional measures of Poverty
• Normally, more than one poverty lines are used to
determine the level of poverty in a given country
• After getting a poverty lines, people to whom a poverty
lines are applied are divided into groups of well beings
according to their incomes vis-à-vis the poverty lines
• For example, two groups may be used say Tshs 75000
(Lower poverty line) and Tshs 150000 (Upper poverty
line) per adult equivalent per given year prices
• Thus, H/hold with expenditure less than lower poverty
line are referred as Absolutely (hard-core) poor while
those with equal and more than the lower but below
the upper are referred as the less poor, and those equal
2
to and above the upper are called non-poor
 Traditional measures of Poverty
• Advantages of using poverty lines
i. Changes in the well-being positions of the poor
people can be traced
ii. The extent of poverty reduction can be measured
iii. Poor people, ones that actually suffer, can easily be
identified and be helped to reduce their poverty
• Disadvantages of using poverty lines
i. Some essential poverty indicators like access to
education and health care may not be reflected in
the poverty lines, hence they are ignored
ii. Poverty lines, if not well determined and adjusted to
local situations, may not reflect the actual standard
2
of living of the respective population
 Measuring Absolute Poverty using
Monetary Indicators
1. The Headcount Ratio or Index (H)
• This Index measures the incidence of poverty which is
the percentage of people whose income or
expenditures are below the poverty lines. It is expressed
as a percentage giving the incidence of poverty
• H=q/n x 100, Where by;
H = headcount ratio (% of the population getting
income which is lower than the poverty line
q = number of individuals/h/holds whose income is
less than the poverty line
n = total number of people in the sample or 2

population
 Measuring Absolute Poverty using
Monetary Indicators (Cont…)
• Merits of Headcount Ratio or Index (H)
i. It is the simplest and most convenient measure of
poverty incidence
ii. It is useful in testing the effectiveness of poverty
alleviation programmes by finding and comparing
the numbers and percentages of people or
H/holds below the line before and after some
time of implementation of such programme

2
 Measuring Absolute Poverty using
Monetary Indicators (Cont…)
• Demerits of Headcount Ratio or Index (H)
i. The measure treats equally people with incomes
just below the poverty line and those with income
far below the poverty line
ii. It does not indicate income distribution among
the poor, that is, it does not consider inequality
among people to whom it is applied

2
 Measuring Absolute Poverty using
Monetary Indicators (Cont…)
2. Poverty Gap Index (PGI)
• It is also called Poverty depth index or Income
Shortfall commonly used to determine the depth of
poverty in a given population
• It is the amount of income by which the poor fall
short of the poverty lines since it is the difference
between the income of each poor person and the
poverty line
• The sum of poverty gaps is interpreted as the
minimum amount of transfers necessary to bring all
poor people up to the poverty line if preferred2

targeting were possible

 Measuring Absolute Poverty using
Monetary Indicators (Cont…)
2. Poverty Gap Index (PGI)
Thus, the Poverty gap (I) = {(z-µ)/z} x 100
Where: Z = Poverty line
µ = Income of the poor per year
z - µ = amount of money that would be
needed per year to eradicated
poverty, if perfect targeting were
possible

2
 Measuring Absolute Poverty using
Monetary Indicators (Cont…)
• Merits of Poverty Gap Index (PGI)
i. Unlike the headcount method, it treats differently
people with incomes just below the poverty line
and those with incomes far below the line, with a
view to give more priority to the latter

• Demerits of Poverty Gap Index (PGI)

i. It does not show the severity of the poverty
ii. It does not show the distribution of income among
the poor
2
 Measurement of Income Distribution
Among the Poor
• Poverty alleviation efforts mainly targets at helping poor
people get rid themselves of poverty
• Thus, income distribution measurement are vital among
the poor as they are needed to determine inequality
among them with a view to reduce poverty without
increasing inequality
• Lorenz curve and Gini coefficient are widely used to
measure income distribution
• A simple way of measuring inequality is to determine the
ration of income or expenditure of the richest 20% to that
of the poorest 20% of the population, in comparison with
2
such a ratio at the national or global level
 Measuring Relative Poverty Using
Monetary Indicators
• The concept of Relative poverty focusses on the wellbeing
eg. income or expenditure of the poorest x% of a
population vis-à-vis the incomes of the other members of
the population. In this approach, poverty lines are not
used; instead either of the following are used
1. The Average income of a Specific % of the
Population
• Average income of the poorest X%, say 10%, 20%
or 40% of the population is found
• People whose income are less than the above
average income are taken to be poor 2
 Measuring Relative Poverty Using
Monetary Indicators (Cont….)
2. Comparing Income with a Predetermined % of
the mean Income
• The mean income of a Population is determined
• The percentage (say 40%, 50% or 75%) of the
above mean reflecting poverty is estimated
• People whose income are less than the
percentages are taken or considered to be poor

2
 Measuring Relative Poverty Using
Monetary Indicators (Cont…)
• Advantages of using Relative Poverty Approach
i. Measures of absolute poverty provide useful
information on the degree of inequality since they
compare incomes of all members of a population
ii. Relative poverty approach is both politically and
socially appealing since poverty is considered in
the whole society and data obtained using the
approach are worth using in promoting
community based development
2
 Measuring Relative Poverty Using
Monetary Indicators (Cont…)
• Disadvantages of using Relative Poverty Approach
i. Measures of relative poverty do not reflect the wellbeing
of those who are poor; thus, with this regard a relative
poor person may be very rich in absolute terms or vice
versa
ii. Improvement in relative poverty may be reported even
in some cases where absolute poverty might have been
increased
iii. Using relative poverty approach, it is impossible to
eliminate poverty since even if all people are rich, those
with less wealth than others will be said to be poor
Note: Its rarely used in poverty studies due to its weaknesses
2
The End
2
 KEY POVERTY INDICATORS IN TZ
1. Structure of Consumption
• 2017/18 HBS revealed that average consumption
per household per month in Tanzania Mainland was
Tshs 416,927.
• The average household consumption expenditure was
higher in Urban Areas (Tshs 534,619) than in Rural
Areas (Tshs 361,956).
• There are significant variations in the average monthly
consumption expenditure per household across regions,
ranging from Tshs 720,946 in Dar es Salaam Region to
Tshs 268,041 in Rukwa Region. A similar pattern is
observed in average monthly food, non-food and total
2
consumption per adult equivalent.
KEY POVERTY INDICATORS IN TZ (Cont..)

2
 KEY POVERTY INDICATORS IN TZ (Cont..)
2. Poverty Line
• Food and basic needs poverty lines for Tanzania
Mainland from 2017-18 HBS are Tanzanian
Shillings 33,748 and 49,320 per adult equivalent
per month, respectively
• Note that, the food and basic needs poverty lines
have increased from Tshs 26,085 and 36,482 in
2011/12 to Tshs 33,748 and 49, 320 in 2017/18
Household and Budget Surveys respectively.

2
KEY POVERTY INDICATORS IN TZ (Cont..)

2
 KEY POVERTY INDICATORS IN TZ (Cont..)
3. Incidence and Depth of Poverty
• The proportion of Tanzanians living below the
national basic needs poverty line, set at Tshs 49,320
per adult per month based on the 2018 Household
Budget Survey (HBS), declined from 34.4% to 26.4%
in 2007 and 2018 respectively.
• The basic needs poverty headcount fell in all areas
but most dramatically in rural areas.
• In the past decade the proportion of Tanzanians who
are extremely poor and cannot afford to buy basic
foodstuffs to meet their minimum nutritional
requirements of 2,200 kilocalories (Kcal) per adult
2

per day also declined from about 12 to 8%

 KEYPOVERTY INDICATORS IN TZ (Cont..)
• The incidence of poverty is higher in Rural Areas
(31.3%) than in Urban Areas (15.8%) while it is highest
in Rukwa Region (45.0%) and lowest in Dar es Salaam
Region (8.0%).
• Moreover, 8.0% of the population are extremely food
poor, i.e they fall below the food poverty line.
• Extreme poverty is more pronounced in rural areas
(9.7%) than in urban areas (4.4%).
• At regional level, the incidence of poverty for food
poverty is highest in Rukwa Region (19.8%) and lowest
in Kilimanjaro Region (2.1%).
• Not only was the proportion of population living in
poverty reduced, but also the depth and severity of
2

poverty.
 KEY POVERTY INDICATORS IN TZ (Cont..)
• Within 2007 - 2018, poverty depth (poverty gap) decreased
from 10 to 6% and the severity of poverty was more than
halved, from 5 to 2%.
• The poverty gap can allow quantification of the absolute
minimum in terms of how much money (transfer) would be
needed to bring the poor population up to the poverty line.
• The amount of transfer is obtained by multiplying the
poverty gap for Tanzania Mainland (0.062) by the total
population living in private households (52,691,314M) and
multiply by the basic needs poverty line value (49,320 Tshs).
• These results in Tshs 161.1 billion per month (approximately
US$ 70.1 million per month) needed to bring the total poor
population of Tanzania Mainland up to the basic needs
poverty line. 2
KEY POVERTY INDICATORS IN TZ (Cont..)

2
 KEY POVERTY INDICATORS IN TZ (Cont..)
4. Poverty Trend
• The basic needs poverty has declined from 28.2% in
2011/12 HBS to 26.4% in the 2017/18 HBS.
• Similarly, the food poverty declined from 9.7 percent in
2011/12 to 8.0 percent in 2017/18

2
 KEY POVERTY INDICATORS IN TZ (Cont..)
5. Distribution of Poor Population
• Distribution of basic needs poor population
(living below the basic needs poverty line)
within Tanzania Mainland indicate significant
differences between urban and rural
population.
• 81% of the poor population reside in Rural
Areas, 16.1% in Other Urban Areas and 3.0%
are in DSM Region.
• However, when compared to the 2011/12 HBS,
there is a change in the distribution of poor
2

people.
KEY POVERTY INDICATORS IN TZ (Cont..)
• Proportion of poor population in rural areas
decreased from 84.1% in 2011/12 to 81.0% in
2017/18, the poor in Dar es Salaam doubled
from 1.5 to 3.0% and in Other urban areas it
increased form 14.4 to 16.1%.
• The HBS 2017/18 results at national level
shows that, Mwanza region has the highest
number of poor people and Njombe has the
lowest

2
 KEY POVERTY INDICATORS IN TZ (Cont..)
6. Poverty by Household Composition
a) Poverty by Household Size
• The 2017/18 HBS results show that poverty
increases with an increasing number of
household members.
• Basic needs poverty is lowest in one-person
households (0.1% for food poverty and 1.7%
for basic needs poverty) while the highest
poverty rate is found in households with 7 or
more household members (12.9% for food
poverty and 38.7% for basic needs poverty)
2
 KEY POVERTY INDICATORS IN TZ (Cont..)
6. Poverty by Household Composition
a) Poverty by Household Size

2
 KEY POVERTY INDICATORS IN TZ (Cont..)
6. Poverty by Household Composition
a) Poverty by Household Size

2
 KEY POVERTY INDICATORS IN TZ (Cont..)
6. Poverty by Household Composition
b) Poverty by Sex of Household Head
• The findings of the 2017/18 indicate that
poverty is associated with the sex of the
household head.
• 26% of male headed households and 27.4% of
the female headed households are poor by
basic poverty measurement.
• On the other hand, 8.1% of male headed and
7.9% of female headed households are food
poor 2
 KEY POVERTY INDICATORS IN TZ (Cont..)
6. Poverty by Household Composition
b) Poverty by Sex of Household Head

2
 KEY POVERTY INDICATORS IN TZ (Cont..)
6. Poverty by Household Composition
c) Poverty by Number of Children
• As in 2011/12 HBS, the 2017/18 HBS shows the
association between the number of children and
incidences of food and basic needs poverty.
• Basic needs poverty rate for households with no
children under age five is 20.6% and increases with
increasing number of children to 40.7% for
household with six or more children.
• A similar pattern is observed for food poverty, where
the rate increases with increasing number of under five
children from 5.9% in households with no children to
17.4% in households with 6 or more children 2
 KEY POVERTY INDICATORS IN TZ (Cont..)
6. Poverty by Household Composition
c) Poverty by Number of Children

2
 KEY POVERTY INDICATORS IN TZ (Cont..)
6. Poverty by Household Composition
d) Poverty by Age Group and Sex
• More than sixty percent (60.8%) of basic
needs poverty is accounted by individuals
aged 0-19 although there is no difference by
sex.
• In Tanzania Mainland, age groups 0 - 4
(17.5%) and age groups 10-14 (17.1%) have
the highest basic needs poverty share
compared to other age groups.
2
 KEY POVERTY INDICATORS IN TZ (Cont..)
7. Income Inequality
• This refers to the extent to which income is
distributed unevenly among the population.
• Consumption per adult equivalent can be used to
examine inequality of income, in which Gini
coefficient is the most common index used to
measure inequality.
• The Gini coefficient ranges from 0 (every person
has the same consumption) to 1 (one person has
all of the consumption in the country).
• The 2017-18 HBS showed a rise in consumption
inequality from 0.34 in 2011-12 to 0.38. 2
 KEY POVERTY INDICATORS IN TZ (Cont..)
7. Income Inequality
• The rise was also observed in Other Urban
Areas – apart from Dar es Salaam ranging from
0.37 to 0.38, Dar es Salaam (from 0.35 to 0.42)
and Rural Areas (from 0.29 to 0.32).
• There is more inequality among the individuals
in Dar es Salaam (0.42) than in Other Urban
Areas (0.38) and Rural Areas (0.32)

2
 KEY POVERTY INDICATORS IN TZ (Cont..)
7. Income Inequality

2
 NON-INCOME POVERTY INDICATORS IN TZ
1. Household Profile
a) Average Household Size
• The average household size in Tanzania Mainland is 4.6
persons. Male headed h/holds have larger average
h/hold size (4.9) than female headed h/holds (3.9).
• Households within Rural Areas have a larger average
household size (4.9) than those households found in
Urban Areas (4.2).
• Across the regions, Simiyu has the largest average
household size (6.7) while Mbeya Region has the
smallest household size (3.7).
• Trend showing, there is slight decline in average h/hold
size from 4.9 in 2011/12 HBS to 4.6 in 2017/18 HBS.
2
NON-INCOME POVERTY INDICATORS IN TZ (Cont..)
Average Household Size by Region, Tanzania Mainland, 2017-18 HBS

2
NON-INCOME POVERTY INDICATORS IN TZ (Cont..)
1. Household Profile
b) Proportion of Dependants
• The proportion of dependants (age
dependence) was recorded as 0.48 at national
level.
• More than half (0.51) of the Rural population is
dependants compared to 0.40 of their
counterpats Urban population.
• Proportion of dependants varies among
regions with Simiyu region having the largest
proportion (0.55) of dependants and Dar es
2
Salaam Region (0.35) the smallest
NON-INCOME POVERTY INDICATORS IN TZ (Cont..)
2. Housing Conditions
• The use of modern roofing, wall and flooring
materials for dwelling units has observed to be
increased over time.
• Dwelling units are more likely to have modern
roofing materials (84.1%) compared to modern
wall (78.8%) or modern flooring (50.1%).
• However, most significant improvement
observed in the use modern materials was for
the walls.
• The use of modern materials increased by 33%
points from 46% in 2011/12 to 79% in 2017/18.
2
NON-INCOME POVERTY INDICATORS IN TZ (Cont..)
2. Housing Conditions
• Increases in use of modern roofing and flooring
materials during that same period were lower,
16 and 10% points, respectively.
• Percentages of Rural households using modern
roof, walls and floor materials are 76.6, 70.5
and 32.1 respectively and 97.6, 94.0 and 85.6
in Urban Areas respectively

2
NON-INCOME POVERTY INDICATORS IN TZ (Cont..)
Percentage of Households with Houses Built with Modern Materials
by Type of Material, Tanzania Mainland, 1991-92 to 2017-18 HBS

2
NON-INCOME POVERTY INDICATORS IN TZ (Cont..)
3. Electricity Connectivity
• Survey results show that about 29% of h/holds in
Tanzania Mainland are connected to electricity
(TANESCO).
• This is an increase of 11.1% points from that of
2011/12 HBS. Six in ten (63.2%) h/holds in Urban
Areas are connected to electricity compared to 1 in
10 (10.4%) h/holds in Rural Areas.
• Electricity connectivity varies across regions with
Dar es Salaam having the largest percentage (79.9%
of h/holds) followed by Kilimanjaro (44.9%).
• The smallest percentage of h/holds connected to
electricity is found in Singida Region (7.5%)2
NON-INCOME POVERTY INDICATORS IN TZ (Cont..)
Percentage of households with Main Building Connected to
Electricity, Tanzania Mainland, 1991-92 to 2017-18 HBS

2
NON-INCOME POVERTY INDICATORS IN TZ (Cont..)
4. Energy Use
a) Main Source of Energy for Lighting
• 29% of Tanzania Mainland’s h/holds use
electricity as the main source of energy for
lighting followed by torch or rechargeable
lamp (27.5% of h/holds), solar power
(26.5%) and kerosene (wick lamps) (7.0%).
• Proportion of h/holds using electricity for
lighting is higher in Urban Areas (63.7%)
than in Rural Areas (10.0%).
2
NON-INCOME POVERTY INDICATORS IN TZ (Cont..)
4. Energy Use
a) Main Source of Energy for Lighting (Cont…)
• At regional level, Dar es Salaam (80.0%)
has the largest percentage of households
that use electricity as the main source of
energy for lighting, followed by
Kilimanjaro (45.7%) and Mbeya (34.7%)
while Singida Region (7.0%) has the
smallest
2
NON-INCOME POVERTY INDICATORS IN TZ (Cont..)
4. Energy Use
b) Main Source of Energy for Cooking
• The main source of energy for cooking in Tanzania
Mainland is firewood (60.9%) followed by charcoal
(28.8%), industrial gas (3.2%), Electricity (2.1%),
paraffin (1.3%) and solar (1.1% of h/holds).
• Use of firewood as the main source of energy for
cooking is more common in Rural Areas (84.8% of
households) than in Urban Areas (17.4%).
• Kagera Region (87.5%) has the largest percentage of
h/holds using firewood as a source of energy for
cooking while DSM (5.9%) has the smallest. 2
NON-INCOME POVERTY INDICATORS IN TZ (Cont..)

5. Water
• In Tanzania Mainland, nearly nine in ten
households (87.8 %) use water from
improved water sources during the rainy
season while 73.0 percent uses such water
during the dry season

2
NON-INCOME POVERTY INDICATORS IN TZ (Cont..)
6. Toilet Facilities
• In Tanzania Mainland, 93% of h/holds have any
toilet facility (use toilet of any kind).
• Out of h/holds with any toilet facility, 82% have
un-improved toilet facilities while 18% have
improved toilet facility.
• Households in Urban Areas (33.5%) are more
likely to have improved toilet facilities than
households in Rural Areas (8.9%).
• Regions with relatively large percentages of h/holds
with unimproved toilet facilities are Kagera (95.9%),
Manyara (94.7%) and Singida (93.6%) 2
NON-INCOME POVERTY INDICATORS IN TZ (Cont..)
7. Ownership of Bank Accounts
• Overall, 12.3% of h/holds in Tanzania Mainland
have at least one person who operates a bank
account.
• Households in Urban Areas (23.8%) are about four
times more likely to have members who operate
bank accounts than households in Rural Areas
(6.1%)
• Households with members who operate bank
accounts vary greatly across regions, from 31.4%
in Dar es Salaam to only 2.3% in Kigoma
2
The End
2
 Assignment 2
With specific examples, explain various causes of
poverty particularly in less developed nations,
including Africa, and provide their appropriate
solutions for poverty alleviations.
Instructions;-
1. Avoid copy and pasting from internet sources
2. Font size; 12, Font type Times New Roman, Margin 2.5
cm (top & left) and 2.0 cm (bottom & right)
3. Group work of at least 4 and not more than 5 members
4. Submission date; 10th June, 2021 before 1500Hrs
5. 3 – 4 pages, references exclusive
6. Penalty shall be imposed for violating instructions
2