A Poverty Forecasting Tool: A Case Study of Senegal

Type Working Paper - WP No. 1
Title A Poverty Forecasting Tool: A Case Study of Senegal
Author(s)
Publication (Day/Month/Year) 2005
URL http://www.enda-sigie.org/bases/sigie/ressources/afd-wp1-povert-forecast-tool_2005.pdf
Abstract
Poverty reduction has become the focus of economic policy in many Sub-Saharan African countries. As a result, a need for new social indicators has arisen to monitor the application and effectiveness of Poverty Reduction Strategy Papers (PRSPs). In recent years, there have been renewed efforts to develop tools aimed at better understanding the channels through which PRSP measures affect the poor. The approach presented in this paper links macroeconomic models with representative household and micro household income data to measure the effectiveness of poverty reduction policies. In essence, this is a simple micro-accounting method that can be linked to the macroeconomic forecasting model (Jumbo), run by the AFD for the CFA Franc Zone. An output of the revenue forecast for each representative household is introduced into a simple micro-simulation model in order to obtain a yearly poverty indicator. The interpretation of the results, with the help of the macroeconomic environment described in the Jumbo model, allows for an analysis of the poverty outlook. After describing the method, data from the Senegalese household survey ESAM II is analysed and an overview of poverty in Senegal is given.

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