1. Introduction Since the1990s, Lao Péople’s Democratic Republic has conducted two national household surveys in 1992-93 and in 1997-98, and a third survey is currently underway. ‘These surveys have generated useful data and have been the primary source of information on poverty in the country. Yet, the analysis based on these surveys has sometimes produced conflicting results. For instance, based on the first survey, LECS I, World Bank (1995) showed that in 1992-93, the Souther region was the poorest with 60 pereent poverty incidence compared to 46 percent in the North and 40 percent in the Central region. A later study (Stenflo, 1999) however concluded (for same year) that the Norther region was the poorest with 54 percent poverty incidence compared to 49 percent in the South and 37 percent in the Center. These conflicting results clearly have serious implications for any formulation of poverty reduction policies. ‘The main reason for the difference lay in the setting of the poverty lines in the two studies, in particular how they handled spatial and temporal changes in the cost of living. While they reached opposite conclusions, both studies failed to utilize all the available information on prices in order to take account of differences in regional and monthly costs of living. Instead, they resorted to adjustments based on regression of per capita consumption on regional and monthly dummy variables that confounded variations in cost of living with real changes in the levels of living. Two further studies, Datt and Wang (2001) and Kakwani et al. (2001), re-examined LECS I and I data with a view to addressing the deficiencies of past work and producing a consistent set of poverty estimates. While both studies made greater use of available price information in constructing poverty lines and produced a set of estimates that were broadly comparable with each other, there nevertheless remained several differences in their approach in such areas as the measure of individual welfare, the treatment of intra- year price variation, urban-rural price differentials, and the setting of non-food poverty lines.” * Refers to the Lao Expenditure and Consumption Survey conducted by National Statistics Center. ® ‘These are the main points of departure, but there are several other differences in detail. See Knowles (2001) for a review.