Attachments
Minimum Expenditure Basket (MEB) Calculation
A MEB is defined as what a household requires in order to meet their essential needs, on a regular or seasonal basis, and its average cost. It is a monetary threshold – the cost of these essential goods, utilities, services and resources, typically for one month. In other words, this is similar to a poverty line. Essential needs are defined as goods, utilities and services required by households to ensure survival and minimum living standards.
Approaches of constructing MEB
• Expenditure Based
• Right Based
• Hybrid
The expenditure-based approach relies on detailed household-level expenditure data. This examines the expenditures of households ‘just able to meet their essential needs’ to reveal the minimum cost of covering essential food and non-food. This is similar to the approach used for national poverty lines.
The right-based approach is related to International Humanitarian and Human Rights Law that protects the rights of crisis-affected persons to food, drinking water, soap, clothing, shelter and life-saving medical care. The Sphere Standards outlines minimum standards in food security and nutrition, shelter and settlement, health and WASH. The ‘rights-based MEB’ comes from this thinking: How much would a household need to spend on the local market to meet these needs? This is often done through a sectorial approach.
The household expenditures-based approach can be more realistic approach because this tells us something about how households consume, and this is a consumption aggregate. This relates to the survival MEB (the absolute minimum amount required to maintain existence and cover lifesaving needs) through which we can target the severely and moderately vulnerable HHs with the cost-effective transfer value. The “reality check” of the MEB result can be done checking against the national poverty line, the casual wage rate or minimum wage or any other info you have on cost of living or income in the area of interest.
Based on the above theoretical/technical concept and methodology, we used the national income and expenditure surveys such as Annual Household Survey (AHS) 2016/17 and Nepal Living Standard Survey (NLSS) 2011 conducted by Central Bureau of Statistics to calculate MEB. Due to unavailability of recent NLSS survey that estimates poverty threshold, we used AHS to calculate MEB using the consumption decile groups of people who can meet their essential needs.
For our calculation, we excluded bottom 20% of people and top 50% of people. We calculated average per capita expenditure per day averaging from bottom 30 to 50 percent consumption decile groups and then checked with the Food Consumption Score whether these groups meet the minimum acceptable consumption of diversified foods. We found that these groups of people met the acceptable consumption of diversified foods that require people to meet basic food requirements. We also calculated food and non-food expenditure based on the share of expenditure on food and non-food from the AHS.