Knowledge Showcases

Tackling Extreme Poverty Using a Household-based Approach

By Karim Alibhai The worlds poorest households continue to be the most vulnerable in the face of multiple global crises. A household-based approach can work to alleviate ultra-poverty.
Multiple Crises Affect the Poorest In the context of multiple crises, the worlds poorest are more vulnerable than ever. The recent food price spike has lead to an increase in the number of poor households by 100 million.1 The recent financial crisis is worsening poverty.2 In addition, climate change is threatening the livelihoods of millions.3 The worlds poorest are the most likely to be left out of conventional sector-based or macro-level development programs. Experience and research have shown that the needs of the ultra poor, and the need to adapt to climate change,4 are best addressed by working at the household level. The Household-based Approach In Asia, the Co-operative Housing Federation of Canada uses a household-based approach rooted in the principles of the Sustainable Livelihoods Approach. (For an introduction to the SLA, visit Livelihoods Connect.) The principles of the approach are: Household-based: Programs are designed around the individual aspirations and plans of the poorest households in a target area. Asset-focused: Design and monitoring focus on enumerating, understanding, and enhancing the five categories of household assets, viz., natural, physical, social, financial, and human. Aspiration-based: Projects and programs are designed to fulfill the stated livelihood aspirations of poor households.
Social Capital
Social S i l Capital it l

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Figure 1: Example of HIP (before and after) from Quy Chau, Viet Nam
Vi Thi Huong Natural Human C Financial Physical Social capital 52 12 20 8 40
Vi Thi Huong (hungry group- female headed) in first survey

Natural Assets 100 80 60 40 20 0

Human C it l H Capital
Vi Thi Huong

Physical Assets

Financial Assets

Pentagon of Vi Thi Huong in first and second survey

First survey Second survey

Natural Human Financial Physical Social 52 12 20 8 40 60 36 36 24 56

Natural Assets
100 80 60 40 20 0
First survey y Second survey

Human Capital

Physical Assets

Financial Assets

Aspirations A households aspirations represent steps that a household wishes to take to address poverty concerns (for example, increasing the number and quality of meals, or sending children to school). The additional income required to reach these aspirations is called the aspiration gap. Based on income requirements, household members identify resources and livelihood activities. Household income serves as an all-encompassing proxy indicator for the attainment of livelihood aspirations. Figure 2: Aspirational Model (Sri Lanka)
Assess the familys expenditures Food Education Ed ti Medicine Other Assess the familys income Main income source Other income sources Identify suitable livelihood strategies

Targeting and Working with the Ultra Poor Households are targeted based on a community wealth ranking exercise. Through this, the poorest households are identified, and the members of the households are coached to identify their livelihood aspirations and plan their livelihoods to fulfill these aspirations. Household-Investment Plans Village households or small community groups are asked to assess their assets levels in the five groups. Figure 1 shows how these are scored and displayed graphically across an asset pentagon.

Expenditure (current + aspiration)

- Income Aspiration A i i Gap

Aspiration analysis

Household-Based Plan

From HIPs to Household Plans After the household has assessed its assets and aspirations, a household plan is created. In this plan, the household identifies how it will reach these aspirations, what household resources it will use, and how the project or program intervention will support this process. Household livelihood activities are then aggregated and form the basis of project or program implementation. Aspirations also serve as baseline data for monitoring and evaluation. Monitoring Livelihood Results Monitoring household success in reaching aspirations is based on: 1. Income: Household income can be monitored using household cash books. Aspirations are said to have been fulfilled if the household has achieved the income increase to finance these (i.e., the household has filled the aspiration gap). Asset Increase: A subsequent HIP survey can be used to compare each households asset levels against the baseline HIPs. An example of this is provided in Figure 1 above. Household Classification: Based on their level of success in their chosen livelihood activities, households can be classified as entrepreneur, self-employed, primary stage, or unsuccessful. This system is useful both to monitor results and to facilitate coaching to the households specific needs.

Figure 3: Success Categories (Sri Lanka)

Although the household is the basic unit of analysis, intrahousehold data (sex-disaggregated data) must be used to monitor impacts on men and women. When activities are planned to generate income, a market analysis must be undertaken at the planning stage (in parallel with household planning). Climate change poses a major threat to rural livelihoods. Work with the ultra-poor in climate vulnerable areas must begin to integrate proactive climate change adaptation into household livelihood strategies including at the programmatic level. Household-based approaches are heavily dependent on their local context. They must be adapted to local social, environmental, and political realities.

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Challenges and Lessons Learned The household-based approach requires high amounts of technical capacity. It also demands time and resources to complete and analyze the household surveys and deliver projects and programs on time and efficiently. When working with ultra-poor households, it is important to maintain engagement with the wider community to ensure support and buy-in.

Robert Zoellick, referenced in The New Face of Hunger. The Economist, April 17 2008. 2 Robert Zoellick. Crisis Hurting Developing World, G-20 Must Restore Confidence- Zoellick, World Bank press release, 31 March 2009. 3 Easterling, W.E., P.K. Aggarwal, P. Batima, K.M. Brander, L. Erda, S.M. Howden, A. Kirilenko, J. Morton, J.-F. Soussana, J. Schmidhuber and F.N. Tubiello, 2007: Food, Fibre and Forest Products. Climate Change 2007: Impacts, Adaptation and Vulnerability. Contribution of Working Group II to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change, M.L. Parry, O.F. Canziani, J.P. Palutikof, P.J. van der Linden and C.E. Hanson, Eds., Cambridge University Press, Cambridge, UK, 273-313. 4 Tanner, T. and T. Mitchell. Entrenchment or Enhancement: Could Climate Change Adaptation Help Reduce Poverty? Chronic Poverty Research Centre Working Paper No. 106. Brighton, UK: Institute of Development Studies, 2008; World Conservation Union, International Institute for Sustainable Development, Stockholm Environment Institute, and Swiss Organisation for Development and Cooperation. Sustainable Livelihoods & Climate Change Adapation. 2004.
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For further information Contact Karim Alibhai (kalibhai@chf-partners.ca), Regional Director, Asia, Co-operative Housing Federation of Canada, and Armin Bauer (abauer@adb.org), Senior Economist, Asian Development Bank Poverty Reduction, www.adb.org/poverty/default.asp Asian Development Bank is dedicated to reducing poverty in the Asia and Pacific region. www.adb.org/knowledgeshowcases The Knowledge Showcases highlight innovative ideas from ADB technical assistance and other knowledge products to promote further discussion and research. The views expressed in this publication are those of the author(s) and do not necessarily reflect the views and policies of ADB or its Board of Governors or the governments they represent.