Poverty and inequality

  This chapter looks at the spatial distribution of poverty and inequality. While poverty certainly has a great impact on society as a whole, it affects principally the lives of individuals and local communities, and has a very strong geographical dimension. Defined as a state of deprivation, the phenomenon of poverty has multiple dimensions, and is not limited to economic aspects such as the lack of income or the opportunities to generate income, or the lack of means of production, or the lack of assets as a net in times of shortage. Poverty also encompasses dimensions such as vulnerability to various kinds of shock, the lack of opportunities to participate in decision-making, and the lack of access to information, to name just a few.

All these aspects of poverty also have a geographical dimension. To measure each of these dimensions separately is very difficult, particularly in a spatially disaggregated form. Nevertheless, measures of poverty are essential for effective pro-poor policy-making, and availability of information on the geographic distribution of poverty, however defined, is becoming increasingly recognised as an essential basis for poverty analysis and pro-poor policy-making.

Without a doubt the most widely used measure focuses on the economic dimensions of poverty, largely due to its clear definition and measurability, and the difficulties encountered in measuring the many sociological definitions of poverty.While all the maps presented so far (except for the introductory ones in Section A) are based on actual statistics enumerated in the population census, no sources exist for information on the welfare of every household in the country. To measure household welfare related developments in a country, one typically relies on information from sample surveys. In the Lao PDR, two Expenditure and Consumption Surveys (LECS) were implemented in the 1990s, and a third one in 2003 was conducted to measure and monitor poverty-related developments. Data from these surveys allow estimates of poverty at a regional level.
More spatially disaggregated assessments of poverty are difficult to achieve with such survey data.

The maps on the following pages use a combination of information from the 2003 Lao Expenditure and Consumption Surveys (LECS III) and the 2005 National Population and Housing Census to estimate the incidence of poverty and other measures of welfare at a spatially disaggregated level.  Using household survey data, the relationship between per capita expenditure and various household characteristics is estimated statistically. This relationship is then applied to the same household characteristics in the census data, generating estimates of the standard of living of each household in the census. These are then aggregated to an administrative unit, producing estimated measures of welfare e.g. at village level. While the estimation method might not be able to generate highly accurate estimates for some of the smaller villages, the overall picture of the spatial distribution of poverty is certainly valid. For more information on the methods and results of this study, see: Epprecht et al., 2008: "The Geography of Poverty and Inequality in the Lao PDR".

Poor households are defined as those living below a specific poverty line. We use the “overall poverty line” calculated by DOS, which corresponds to the amount of money required to purchase 2,100 calories per person per day, plus a non-food allowance.