Discussion: Introducing the PPI Indicators and Scoring, Continued
Using the PPI to Estimate Group Poverty Rates
An average of the poverty scores for all individuals in a group will yield a score that is associated with the poverty rate for that portfolio. Referencing the example used in Figure 5, assume there is an MFI with 3,000 clients. Say those clients are tested on January 1, 2007 and found to have the following PPI scores: • 1,000 clients have a score of 10 • 1,000 clients have a score of 22 • 1,000 clients have a score of 33
Deleted: Figure 5
To determine the entire population’s poverty likelihood you must use the look up table to find the corresponding poverty probabilities. After identifying those probabilities the average is taken to obtain what percentage of the population falls under the poverty line. The steps are outlined in Figure 5 below.
Deleted: d
The portfolio poverty rate is the participants’ average poverty likelihood, that is, (1,000 x (91.9% + 77.6% + 77.8%)) ÷ 3,000 = 82.4%. This means that 82.4% of individuals in this group, or 2,472 clients in total, are estimated to be below the national poverty line.
Figure 5: Scoring for Groups For example, an MFI has 3,000 clients • 1,000 clients with scores of 10 • 1,000 clients with scores of 22 • 1,000 clients with scores of 33
PPI Score
0-4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80-84 85-89 90-94 95-100
Below the Poverty Line Total Below Total Above Bottom Half Top Half Below National Poverty National Poverty Below National National Poverty Line Line Poverty Line Line 85.0% 14.3% 99.3% 0.7% 79.7%
12.8%
92.5%
7.5%
61.9%
30.0%
91.9%
8.1%
70.5%
22.9%
93.4%
6.6%
53.2%
24.4%
77.6%
22.4%
42.4%
34.4%
76.8%
23.2%
35.2%
42.6%
77.8%
22.2%
23.8%
24.8%
48.6%
51.4%
22.2%
26.1%
48.3%
51.7%
16.5%
17.1%
33.6%
66.4%
12.6%
21.8%
34.4%
65.6%
8.4%
14.2%
22.6%
77.4%
4.7%
5.4%
10.1%
89.9%
2.5%
7.6%
10.1%
89.9%
1.7%
5.2%
6.9%
93.1%
1.6%
2.2%
3.8%
96.2%
0.7%
1.4%
2.1%
97.9%
0.0%
0.0%
0.0%
100.0%
0.0%
0.0%
0.0%
100.0%
0.0%
0.0%
0.0%
100.0%
The poverty distribution for the MFI of 3,000 clients is: 1,000 x (91.9% + 77.6% 77.8%) 3,000 Or the average of all the poverty likelihood percentages
= 82.4% of the 3,000 clients are below the national poverty line (2,472 clients)
Continued on next page
Formatted: Font: 12 pt, Not Bold Deleted: the diagram below
Formatted: Font: 12 pt, Not Bold Deleted: Figure 5