SOSC 103DSocial Inequality in HK

Lecture 13: Defining poverty in HK

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Development and Poverty

Relations between development and poverty

Year 1971 1976 1981 1986 1991 1996 2001

Gini Coefficient

0.42 0.43 0.451 0.453 0.476 0.518 0.525

0

5000

10000

15000

20000

1971 1976 1981 1986 1991 1996 2001

MonthlyMedianHouseholdIncome

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Distribution of Household Income by Deciles, 1971-2001 (%)

% changeDecile 1971 1981 1991 2001 (1971-2001)

1st (bottom 10%) 2.3 1.4 1.3 0.9 -60.92nd 3.9 3.2 3.0 2.33rd 5.1 4.4 4.0 3.44th 5.1 5.4 5.0 4.45th 7.0 6.5 6.1 5.66th 7.3 7.6 7.4 7.07th 9.0 9.4 9.0 8.88th 11.0 11.5 11.4 11.19th 14.7 15.2 15.5 15.310th (top 10%) 34.6 35.2 37.3 41.2 +19.0

Total 100.0 100.0 100.0 100.0

SOURCE: extract from Zhao, Zhang & Sit (2004)

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Development and Poverty What is the nature of poverty in the

1960s; and does it different from those in the 1990s?

1960s:

‘Making Ends Meet’ (by D. Faure)

E.g. Inadequate food,Poor housing conditions

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Development and Poverty 1990s: ‘Disempowerment and

empowerment’ (Lui & Wong)

Old population

Industrial restructuring of the economy

Marital and family problems -> single parent families

New immigrants from Mainland China

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How to define poverty?

In terms of money/ resources?

living style?

citizenship?

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Defining Poverty –Absolute Poverty Standard Approach

Specify the minimum or basic subsistence level Estimate the percentage of income spend on

food(50%) Example: HK’s low income families in 70s and 80s

Advantages: Convenient; Straight-forward Disadvantages: Narrow conception of poverty; Static

1973

Food 56.6%

Others19.8%

Housing14.0%

Transport4.4%

Durables1.4%

Clothes3.8%

1980

Food 46.4%

Others21.5%

Housing15.1%

Durables6.7%

Clothes5.0%

Transport5.3%

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Relative Standard Approach Poverty is defined in relative nature Poverty is measured with reference to the

degree of inequality in society Measures of poverty line (The Hong Kong

Council of Social Service): Half of the median household income (HK$9,000

for family of 4) Hong Kong’s Case (1.12 million people out of a total

population of 6.9 million who live below the poverty line ~ 16%)

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Relative Standard approach (cont’)

Advantages: Links poverty to income inequality in the society Poverty means more than receiving welfare (the

definition that usually used by governments)

Disadvantages: Difficulties in collecting right income information Exaggerates the amount of poverty: ignore the

help in kind received by the poor Underestimates poverty: income is not the sole

measurement

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The Style of Living Approach9 items included in a deprivation index (Chow, 1983):

1. Do all members have a permanent bed for their own use?

2. Does the household have a television set?3. Does the household have a refrigerator?4. Do members usually consult doctors when ill?5. Does the family go out to celebrate on occasions?6. Does the family eat fresh poultry apart from festivals?7. Does the family present gifts to relatives or friends on

days of events?8. Do household heads give away “red pocket money”

during the Chinese New Year?9. Do household heads take friends now and then to

restaurant ?

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The style of living approach (cont’)Wong & Lee (2002)

1. To cut expenses, would you avoid taking bus2. Would you avoid switching on lighting at home even

when necessary 3. Do you have difficulties in affording red pocket

money in the last Chinese New Year 4. Would you buy food right before the market closes

because of cheaper prices 5. Is any of your household member without a fixed bed

to sleep 6. Are you having insufficient food for at lease one meal

during last week 7. Do you have difficulties in buying medicine when you

get ill (9.4%)

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Number of poor people receiving welfare in HKThe number of people that receive social

assistance: 295,700 CSSA cases or 534,220 recipients:

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Who are the poor people in HK??

Elderly51%

PermanentlyDisabled

5%

Sick/ TemporarilyDisabled

8%

Single-parentfamilies

13%

Low income people5%

Unemployed16%

Others2%

Cases of CSSA (in year 2004)

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Suggested Reading:

Wong, Hung & Lee, Mim Ming (2002) "Study of Hong Kong Poverty Line" (in Chinese, with English summary)http://web.swk.cuhk.edu.hk/~hwong/publication/ Research_monograph/poverty_line_study_report.pdf.