Braving the Storm

This note describes the trends in, and
composition of, absolute poverty based on household
expenditures, and is thus concerned, as a matter of policy
objectives, with access of the population to a particular
minimum standard of living. This should be viewed as
complementary to the companion note on social exclusion
based on Europe 2020 indicators including the relative
at-risk-of-poverty (AROP) rate, focuses on low income in
relation to other residents in a given country. In addition
to the analysis of absolute poverty, the note also presents
an analysis of inclusive growth, aimed at assessing whether
income growth (losses) benefit (impact) differentially the
lowest part (here, bottom forty percent) of the
distribution. Other approaches, such as those including
measures of poverty based on current income, or
self-reported measures of affordability, or approached that
differ in the way they set the poverty threshold exist. The
choice of World Bank’s methodology for purposes of this
report is primarily on pragmatic grounds: (i) it allows for
the analysis of trends during 2007-2011; (ii) the same
methodology was adopted in the previous report (World Bank
2009) to analyze poverty trends during 2004-2007, thus
providing a longer trend; (iii) it allows for comparisons of
trends across the entities of BiH.