Page 116 - Contributed Paper Session (CPS) - Volume 7

CPS2043 Adnan Dawood K. B. et al.
dwelling), dwelling characteristics (such as the number of bedrooms,
availability of some durable goods), demographic characteristics (such as
household size, gender of the head of the household), education
characteristics for the household members, health characteristics, and the
labor force characteristics for the household members. These suggested
independent variables are used in constructing the PMTF to predict the
dependent variable; per capita income/ expenditure. The predicted income/
expenditure (per capita) from the PMTF is used to compare with the household
poverty line. The household is classified as poor when the predicted per capita
income from the PMTF model is less than the poverty line; otherwise, the
household is classified as non-poor. The weakness of the PMTF is always
overestimated for the poorest segment of the households (our desired target);
especially when the national poverty incidence is low.
The aim of this paper is to enhance the efficiency of the PMTF through building
more than one formula to target the poor households. The main idea is to
select three cutoff points on the natural logarithm of the annual per capita
income/ expenditure. These cutoff points should be critical as much as we can,
to separate the population into four segments of households: the first
segment is the High Welfare Level (HWL) which don’t include any poor
household, the second is the Middle Welfare Level (MWL) which could include
poor households, the third segment is the Lower Middle Welfare Level (LMWL)
which also could include poor households, and the fourth is the Bottom
Welfare Level (BWL) which includes most of the poor households. Three PMTFs
are required to classify the population on these four categories. The
households which belongs to the HWL will be ignored because they are not
including any poor household. For the remaining three categories of
households, we need to build another three specific PMTFs, formula for each
category. The range of the first PMTF is lying between the first cutoff point
and the second cutoff point and will represent the MWL. The range for the
second PMTF is lying between the second cutoff point and the third cutoff
point and will represent the LMWL. The range of the third PMTF is lying
between the third cutoff point and the origin point and will represent the BWL.
Figure (1) and Figure (2) explain the idea:

103 | I S I W S C 2 0 1 9