Stats SA misses point in poverty interpretation

WE HAVE the highest respect for the work of Statistics SA and for the information it gives to the public. In the polemic Alternative Information and Development Centre (AIDC) wages against corporate power and prevailing economic and energy policies, we constantly rely on Stats SA’s expertise and tremendous experience. AIDC is not the “enemy” of Stats SA. We are users of its reports, tables and diagrams.

After reading the Statistician-General Pali Lehohla’s response to our February 24 article in Business Report and the AIDC press statement of February 19, our admiration also stretches to the statistician-gen- eral’s mastery of the English language.

We quote: The assertion by AIDC stating that Stats SA took instructions from the Department of Health is mendacious, irresponsible and inflammatory. It reflects the amateurish way in which these wannabe institutions frivolously trivialise the importance of evidence and information and its contribution to the development of society. Their unscientific and provocative remarks can only sensationalise and mislead the uninitiated and perhaps this is their ladder to fame. Unfortunately they went on a perilously dangerous rung that will seal their infantile fate.

Our answer is: Foot Note 9 in the February 3, 2015 methodological report on rebasing of national poverty lines… which is what we are discussing, reads as follows: “Statistics South Africa (2008) used 2 261 kilocalories perperson-per-day as the minimum energy requirement. In this round of poverty lines development, the minimum energy requirement is set at 2 100 kilocalories per-person-per day as per recommendation from the Department of Health” (Our emphasis).

Is this true or not? Are we quoting correctly? Was the South African Medical Research Council (MRC) consulted before the change? In the joint Treasury and Stats SA 2007 report, A National Poverty Line for South Africa, we read: “The daily energy requirement, as recommended by the South African Medical Research Council (MRC), is 2 261 kilocalories per person.”

The redefinition of food poverty is only announced in the above foot note. That is probably why Lehohla missed it.

Lower-bound and upper-bound poverty builds logically on the definition of food poverty (or extreme poverty), which is based on a calorie-intake recommendation, as is pedagogically explained in the report.

The redefinition (to the World Health Organisation’s emergency standard) shifts all three poverty lines in South Africa downwards by R25, as can be ascertained by the simple formula on page 10 in the report. Is our R25 estimate correct? It is the task of Stats SA to spell it out. The number should be in the report.

Goalposts

In our opinion, it is also Stats SA that should tell the users, in the report, that the estimated number of poor people changes dramatically when the starting point of the poverty lines is changed. The rebasing of the poor household consumer basket added R14 to the food poverty line. Only that placed an additional 761 000 individuals in food poverty in 2011. From that, AIDC concluded that an additional R25 statistically places another 1.3 million to 1.4 million South Africans in food poverty and about 1 million more below the political bench mark “lower bound poverty”.

In our view, Stats SA has not followed the “general conclusion from international experience” that… “a consistently applied poverty line is a useful social index”, to quote from the 2007 paper referred above. To shift goalposts without saying what the consequences are for shares of population officially living in three different degrees of poverty is not to be transparent. It is untypical of Stats SA practice.

Finally, the statistician-general’s sulphur smelling advice to simply deflate the 2011 rebased poverty lines with the consumer price index to get an account backward in time is irrelevant to our concerns. The goalposts have been shifted by R25 in 2011 prices. Statistically, the redefinition of extreme poverty makes the situation “better” from 2011 and back in time. Does Lehohla agree?

The March 2014 report from Stats SA that made poverty estimates back to 2000 must now be revised. Does Lehohla agree?

The government has an easier task to fulfil its two goals when fighting poverty. That South Africans living below the lower bound poverty line should be reduced by half from 1990 to 2015. This is the Millennium Goal; that no one should live below that benchmark by 2030. This is the goal of the National Development Plan.

The statistician-general’s vitriolic response doesn’t do Stats SA any good.

Stats SA has not followed the general conclusion from international experience that a consistently applied poverty line is a useful social index.

Dick Forslund is senior economist at the Alternative Information and Development Centre.