This report explores measures of poverty and their application in Timor-Leste. A focus on
measuring poverty reflects a concern with understanding the extent to which people’s basic,
day-to-day needs are being met, as well as understanding constraints to people taking
opportunities to enrich their lives.
The concept of consumption / income poverty is the most commonly used approach to
measuring poverty. Here, poverty is defined by whether a person’s income or consumption
is below a defined “poverty line”. The first part of this report undertakes a critical analysis
of the key consumption poverty studies that have been undertaken in Timor-Leste. The
main message of this analysis has been to cast significant doubt on some of the poverty
estimates that have been used. The only reliable estimate, based on a relevant nationally
representative survey, is the 49.9% found in 2007. Our research suggests that the 41%
estimate for 2009/10, while often quoted (for example, in the most recent Government
Budget papers), is not a reliable estimate. Our analysis suggests that 45.1% is more valid,
but even then, there is much margin for error in the approach taken to arrive at this estimate.
A further approach to predicting the poverty rate from the 2011 Household Income and
Expenditure Survey suggests a rate of slightly above 50%, although this estimate is also
quite unreliable.
Any further nationally representative measures will need to wait until the results of the 2014
Timor-Leste Survey of Living Standards are published.