Haughton and Khandker
12
household. Using Indonesian data for 1998–99, Chaudhuri, Jalan, and Suryahadi (2002) estimated (12.7) where Φ is the cumulative density function of the standard normal distribution. They then sorted households into three categories: • The highly vulnerable, for whom vˆh > 0.5 • The “relatively vulnerable,” for whom 0.22 < vˆh < 0.5, where 0.22 is the headcount poverty rate • Those who are “not vulnerable.” Their key results are set out in table 12.3. Perhaps the most important point to note in table 12.3 is that although 22 percent of those surveyed by the Mini-SUSENAS survey in Indonesia in 1998–99 were poor, fully 45 percent were considered to be vulnerable, of which 8 percent were highly vulnerable to poverty and the other 37 percent somewhat vulnerable. In other words, vulnerability (as defined here) is more widespread than poverty. This finding accords with the results of participatory poverty assessments, which typically show that a substantial part of the population is seriously and legitimately concerned about falling into poverty, even if they are not currently poor. It also makes the targeting of (future) poverty more difficult, since more people have significant potential for falling into poverty. In this example, the poor constitute 22 percent of the population, but more than 60 percent of those who are highly vulnerable. Or, to put the same point slightly differently, a poor person is almost six times as likely to be vulnerable to poverty as someone who is not currently poor. At first sight, this suggests that poverty predicts vulnerability quite well. Table 12.3 Poverty and Vulnerability in Indonesia, 1998–99 Proportion of total population
High vulnerability Low vulnerability Not vulnerable All groups
240
Criterion vˆ h ≥ 0.50 0.22 vˆ h 0.50 vˆ h < 0.50
Poor
Nonpoor
Poor and nonpoor
0.05 0.12 0.05 0.22
0.03 0.25 0.50 0.78
0.08 0.37 0.55 1.00
Source: Dercon 2001, 35, based on Chaudhuri, Jalan, and Suryahadi (2002).