Statistics Institute Creates Controversy with New Formula to 'Reduce Poverty'

By Navarro, Carlos | SourceMex Economic News & Analysis on Mexico, August 10, 2016 | Go to article overview

Statistics Institute Creates Controversy with New Formula to 'Reduce Poverty'


Navarro, Carlos, SourceMex Economic News & Analysis on Mexico


The government's semi-autonomous statistics institute, the Instituto Nacional de Estadistica y Geografia (INEGI) has come under fire for changing the formula to measure income in Mexico, a step that gave the illusion that poverty levels had come down in the country. The controversy erupted when INEGI released a report entitled Modulo de Condiciones Socioeconomicas (Socioeconomic Conditions Module, MCS 2015). In the report, the institute said it had "improved the measurement of household income," and as a result the income levels for the poorest segment of the population appeared to have increased by more than 33% between 2014 and 2015.

The report, released in mid-July, sparked strong criticism from the Consejo Nacional de Evaluacion de la Politica de Desarrollo Social (National Council for Evaluation of Social Development Policy, CONEVAL), a decentralized agency that measures poverty in Mexico. It objected to the new formula to measure poverty, describing the changes as "not credible." Furthermore, CONEVAL criticized INEGI for not consulting CONEVAL experts when deciding to make the changes and for not providing public documentation of the technical aspects behind the changes.

"[The MCS 2015] presented a real increase of 33.6% in the income of the poorest households in the country in just one year, which is not compatible with the trend that INEGI has presented in its instruments and economic variables," CONEVAL said in a statement.

INEGI defended the changes, saying the institute had wanted to "improve" its methods of data collection to compensate for the fact that people had been underreporting their earnings. According to INEGI, field canvassers were asked to conduct more in-depth interviews to account for even the smallest sources of underreported income, including donations, odd jobs, and assistance from relatives. The 2015 survey reflected these changes.

A loss of credibility

The MC 2015 report also sparked criticism from civil society, particularly from the Accion Ciudadana Frente a la Pobreza (Citizen Action to Confront Poverty, ACFP), which represents 60 organizations that work on poverty-related issues in Mexico, including Centro de Estudios Espinosa Yglesias, Nutre a un Nino, Red por la Salud, Transparencia Mexicana, Asociacion Mexicana de Transformacion Rural y Urbana, Fundacion Filobatrista para el Desarrollo de la Participacion Comunitaria, Grupo para Promover la Educacion y el Desarrollo Sustentable, and many others.

"Authorities at all three levels of government should abandon their obsession to present 'advancements' based on changes to certain indicators used to measure poverty," the ACFP said on its website. "The new statistics presented in the MCS 2015 resurrected a debate on the measure of poverty that we thought had been resolved. This report represents a step backwards."

According to ACFP, the intent of the INEGI policy was to modify the manner in which poverty was measured without taking into account the need to transform the real conditions present in households. "There is no other explanation," it said.

The ACFP challenged authorities to focus on real solutions to address poverty rather than manipulate statistics. "Our country must develop a national policy over the next few decades that allows us to eradicate poverty, promote social mobility, and close gaps of inequality while promoting the exercise of social rights," it said.

Columnist Armando Fuentes Aguirre, who uses the pseudonym Caton, wrote in the daily newspaper Reforma, "In Mexico, we do not fight against hunger, we merely disguise it ... This was evident in the extremely unfortunate incident--which damaged the prestige of INEGI--when someone manipulated the statistics to give the impression that poverty had declined."

Opposition legislators agreed that INEGI would have a difficult time regaining credibility after the MCS 2015 report. "No one can determine with any certainty whether poverty increased, whether it remained the same, or whether it declined," said Sen. …

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