Poverty as an individual welfare : a quantitative study on the relationship between household poverty and individual poverty

Abstract: Household wealth is the gold standard of measuring poverty, however, poor individuals are not necessarily found in poor households. If household wealth is used in a context where the household members are not equally poor, poverty statistics measured on a household level might be wrong. This research aims to test the proposition ‘poor individuals are mainly found in poor households’. The relationship between household wealth and individual poverty is studied using nutritional status as a proxy for individual poverty. The data is sourced from the National Institute for Population Research and Training and consists of a demographic health survey of Bangladesh, covering 17141 households. The analysis is performed through a chi-square test and correlation test. The result of the analysis shows that, of the people with individual poverty, 58% of females, 52.2% of males and 46-53 % of children are living in a household of the poorest 40% hence, the proposition holds. Using household wealth to find individual poverty is successful in so much as finding the majority of the population with individual poverty. However, since close to half of the group of people with individual poverty is not found in a poor household, using household wealth to find poor individuals would result in reduced uptake of the total share of individuals in poverty.