Living income measurement methods – A comparative study and application to cocoa farmers in Cameroon

Katia Covarrubias, Ana Paula de la O Campos, Ajapnwa Akamin, Katharina Krumbiegel and Pascal Tillie

No 365819, ESA Working Papers from Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA)

Abstract: How should the cost of a decent life be quantified, and are living income indicators valid welfare measures for agrifood policies? This paper critically examines two methodologies for estimating living income benchmarks (LIB) and their application in rural agricultural contexts, focusing on cocoa producers in Cameroon. It highlights key differences in data sources and assumptions, finding that LIB estimates are highly sensitive to food expenditure assumptions and non-food, non-housing (NFNH) costs. Statistical tests on the living income gap (LIG) reveal that the indicators satisfy distribution sensitivity and identify vulnerable groups via stochastic dominance analysis, supporting their targeting potential. Simulations based on poverty axioms confirm robustness, leading to the proposal of a censored LIG that better captures the deprivation of vulnerable strata. The paper argues for greater methodological rigour, replicability, and harmonization to enhance the potential of living income indicators for promoting equitable agrifood system transformations.

Keywords: Agricultural and Food Policy; Crop Production/Industries; Food Security and Poverty; Sustainability (search for similar items in EconPapers)
Pages: 50
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Persistent link: https://EconPapers.repec.org/RePEc:ags:faoaes:365819

DOI: 10.22004/ag.econ.365819

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