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A poverty profile for Zambia: based on the 2002-3 living conditions monitoring survey
Draft

Gabriel Demombynes
Contact: gdemombynes@worldbank.org

The World Bank

21 February 2005

This is a draft document - comments are encouraged and welcomed.
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Introduction

Zambia’s transition to multi-party democracy in 1991 stoked optimism that its dormant economic potential would be wakened and that revived economic growth would improve the lot of the nation’s poor. Unfortunately, Zambia’s hopes for a sustained economic recovery during the 1990s have remained unrealized. The continued deterioration in the international price of copper, the scourge of HIV/AIDS, and acute governance and policy failures have conspired to stifle the nation’s progress. At the macro level, the disappointments of the decade are reflected in the decline of GDP per capita by 1.5 percent per year over the 1991-2002 period. A number of studies have examined the implications of this poor growth at the micro level and more generally assessed Zambia’s poverty and social conditions during the last decade. These studies have relied chiefly on a series of household surveys conducted during the 1990s, most prominently the 1998 Living Conditions Monitoring Survey (LCMS). This paper updates past analyses, using data from the 2002-03 LCMS. A key element of the analysis is the identification of poverty rates for the nation as a whole and various subgroups. A new poverty line and corresponding poverty figures are generated based on the consumption data in the survey.

This paper also offers a detailed examination of the profile of the poor. For this analysis, rather than divide the population simply by poor and non-poor, we examine the characteristics of the rural and urban populations, grouping individuals by quintiles of the national distribution of household consumption. This approach offers a broader view than a simple poor/non-poor split.

The analysis finds that more than half of Zambians have consumption levels insufficient to meet their basic needs, and more than a third are severely poor. Specifically, 56 percent of Zambians have consumption below the basic poverty line of 73394 Kwacha, and 36 percent have consumption below a lower “core poverty” line. Due to various changes in both survey design and poverty methodology, the poverty figures cannot be compared with estimates from past surveys. Broadly, however, the poverty numbers in tandem with non-economic indicators confirm the general picture painted by the macroeconomic data of a country still dominated by dire poverty.

The poverty profile’s snapshot view of life in Zambia shows patterns largely similar to those from studies in the early 1990s. In rural areas, there is a remarkable homogeneity; the large bulk of people, including those who rank high in terms of consumption, are chiefly engaged in subsistence agriculture. . Few possess any substantial assets, and access to public services other than a school and health clinic is meager. Urban areas present a more complex picture, and people are occupied in a large variety of activities.

The paper is structured as follows. Section 2 describes the 2002-03 LCMS data, highlighting changes from past surveys and explains the difficulties in comparing figures based on this data with earlier poverty estimates. Section 3 describes the methodology behind the calculation of the poverty figures. Section 4 presents the poverty figures at aggregated levels: province, urban vs. rural, time-of-year, and household type. Section 5 provides a rural poverty profile, examining how a number of household and individual characteristics vary by nationallydefined quintiles of household consumption. An urban poverty profile is given in Section 6. An additional look at school attendance is presented in Section 7, and Section 8 concludes.



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