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A Poverty Profile of Mexico in 1989

Diana Alarcón, Terry McKinley

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El incremento absoluto de la pobreza en México, sobre todo en las áreas rurales, entre 1984 y 1989. Este trabajo intenta proporcionar un perfil de la pobreza basado en datos de la Encuesta de Ingreso-Gasto elaborada por el INEGI en 1989. Aquí se concluye que los campesinos y trabajadores rurales asalariados constituyen el grupo más números de pobres y se enfrentan a los grados más profundos y severos de pobreza. De manera consistente, los pobres que trabajan por cuenta propia en sectores no agrícolas del país padecen los estragos de la pobreza aún más fuertemente que los trabajadores pobres. Estos factores ayudan a explicar por qué la desigualdad entre los pobres es un dato significativo y por qué es necesario enfocarse en el alivio de los sectores que padecen de la pobreza más aguda, especialmente en el sector agrícola.


Absolute poverty increased in Mexico between 1984 and 1989, with most of this increase concentrated in rural areas. This paper attempts to provide a profile of the poor based on the 1989 data from INEGI'S Income-Expenditure Survey. The paper condudes that rural wageworkers and campesinos are the most numerous among the poor and face the greatest depths and severity of poverty. On the other hand, the poor self-employed in nonagricultural sectors are consistently worse off than poor workers. These factors help to explain why inequality among the poor is significant and targeting of poverty alleviation at the most severely poor is needed, especially the poorest of the poor in the agricultural sector.

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See Santiago Levy, Poverty Alleviation in Mexico, Working Paper Series, no. 679 (Washington, D.C.: The World Bank, 1991).

For further details, see Diana Alarcón, "Changes in the Distribution of Income in Mexico during the Period of Trade Liberalization," Ph.D. dissertation, University of California, Riverside, December 1993.

Levy also made estimates of poverty based on constructing a line of moderate poverty. The construction of the consumption basket used to define moderate poverty was based on the pattern of consumption of the seventh decile, but it includes several other consumption goods considered essential components of a minimum standard of living. Not surprisingly, over 70 percent of the population have usually been classified as poor when such a methodology is used. The methodology used to construct the consumption basket for moderate poverty can be found in: COPLAMAR, Macroeconomía de las necesidades esenciales en Mexico: situación actual y perspectivas al año 2000, 2d. ed. (Mexico: Siglo XXI, 1989): Appendix II.

All of the above percentages are based on the whole sample of 11 525 households, which are weighted in order to represent the underlying population. Our results based on weighted data usually differ only marginally from those based on unweighted data, which we used initially in order to compare our results to those of the Levy study.

In much of the analysis in this section and others, we analyze the characteristics of the head of household. As is well known, this is not a completely reliable indicator of the condition of the whole household. We hope in the future to supplement our current findings with an analysis of all household members.

All expenditure and income statistics for 1989 are reported in old pesos. In order to convert to new pesos, divide all figures by 1000.

Regression analysis bears out this relationship between the age of the household head and per capita household income for the Mexican population as a whole.

For an elucidation of this methodology, see Lionel Demery, "The Poverty Profile," in Understanding the Social effects of Policy Reform, ed. Lionel Demery, Marco Ferroni, and Christiaan Grootaert (Washington, D.C.: The World Bank, 1993).

For an early application of this concept, see Sudhir Anand, Inequality and Poverty in Malaysia (Washington, D.C.: Oxford University Press, for the World Bank, 1983).

This percentage is equal to 1 minus the income gap ratio.

See Martin Ravallion, Poverty Comparisons: A Guide to Concepts and Methods, Living Standards Measurement Study, Working Paper No. 88 (Washington, D.C.: The World Bank, 1992).

The 1989 Income-Expenditure Survey does not strictly differentiate between rural and urban areas; it differentiates between what it calls "high-density areas" and "low-density areas." For an explanation of this distinction, see INEGI, Encuesta Nacional de Ingreso-Gasto de los Hogares 1989 (México; INEGI, 1992).

For an illustration of the use of this methodology, see a recent publication: Azizur Rahman Khan, Keith Griffin, Carl Riskin, and Zhao Renwei, "Household Income and Its Distribution in China," in The Distribution of Income in China, ed. Keith Griffin and Zhao Renwei (New York: St. Martin's Press, 1993).

Income from cooperatives is the component most prevalent among the poorest of the poor, with a negative concentration ratio, but it is an insignificant proportion of the poor's total income.

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