Small Area Estimation of Poverty in Rural Bhutan

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Abstract

The Small Area Estimation (SAE) of poverty in Rural Bhutan was prepared with an objective to provide a more disaggregated picture of poverty in Bhutan down to the gewog level, based on the Bhutan living standard survey 2007 and Population and Housing Census of Bhutan (PHCB) 2005. The report records the estimation process in detail and describes results of statistical tests for quality checks. According to these tests, the poverty estimates at the gewog level are reliable. The report also enhances the transparency of the process and intends to serve as a guide for future updates. According to the Poverty Analysis Report (PAR) 2007, about one-fourth of the country's population is estimated to be poor with rural poverty as high as 30.9 percent. This report, which presents some results of the SAE, compliments the PAR 2007. However, vast differences in poverty levels across dzongkhag (district) and gewog (sub-district) persist. Popular perceptions suggest that the geography of poverty and of economic affluence is accentuated at the local level, and that an understanding of the spatial distribution of economic welfare is needed in order to spread the benefits of growth to lagging regions. In order to fulfill Bhutan's development philosophy of gross national happiness, and poverty reduction, it is essential to understand its geographic and spatial patterns. In the case of Bhutan, its land-locked geography and sparse population pose major challenges for poverty reduction. Poverty maps will help the government and development partners locate pockets of poverty which might otherwise be overlooked.