This paper attempts to estimate the poverty levels of participants in development programs in the Philippines. It uses the "2002 Annual poverty Indicators Survey" to construct an objective poverty scorecard that allows any program to estimate the likelihood that a client is poor.
The scorecard:
* Uses 10 simple indicators that are:
o Inexpensive to collect, easy to answer and simple to verify;
o Liable to changes over time as poverty status changes;
o Strongly correlated with poverty.
* Is easy to understand and practical to use.
* Allows field workers to compute scores by hand, on paper, in real time.
It works as follows:
* A participant's score corresponds to a "poverty likelihood", that is, the probability of being poor;
* For a group, the overall poverty rate is the average poverty likelihood of the individuals in the group;
* For a group over time, progress is the change in its average poverty likelihood.
The paper finds that:
* The scorecard accurately and objectively estimates the likelihood of having income below the national poverty line;
* With 90% confidence, a household's estimated poverty likelihood is accurate within +/- 6 percentage points and a group's estimated overall poverty rate is accurate within +/- 1 percentage points.
The paper concludes that the poverty scorecard can help development programs to target services to the poor, track participants' progress out of poverty through time and report on participants' overall poverty rate.
