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To objectively measure poverty, most developed economies (such as the Organisation for Economic Co-operation and Development and the European Union) use household income as the statistical indicator.  Different definitions of household income can be adopted to meet specific analytical needs.  In Hong Kong, the analytical framework of the poverty line consists of four sets of poverty statistics compiled based on household income of different definitions, including one set of “pre-intervention” statistics and three sets of “post-intervention” statistics.

Pre-intervention” poverty statistics are compiled with the assumption of no prevailing government policies and measures, i.e. deducting income provided by the government policies and measures from monthly household income, and using 50% of the median of the pre-intervention monthly household income as the poverty line to identify poor households and poor population (i.e. adopting the concept of “relative poverty” to set the poverty line).  Six different poverty lines are defined separately for households of different sizes (i.e. 1-person, 2-person……6-person+).  Households with pre-intervention monthly household income lower than the poverty line are defined as “pre-intervention poor households” and all members of these households are referred to as “pre-intervention poor population”.  However, this set of poverty statistics is hypothetical and does not reflect the actual poverty situation faced by households.  Then, what is the use of the statistics?  The statistics exclude the effects of government policies and measures, which form an objective benchmark for assessing the effectiveness of the policies and measures.
 
Post-intervention” poverty statistics are compiled based on monthly household income including the income provided by the government policies and measures.  Households with post-intervention monthly household income lower than the poverty line are defined as “post-intervention poor households” and all members of these households are referred to as “post-intervention poor population”.  Their structural characteristics can then be analysed in detail to reflect the actual poverty situation faced by households and support the analysis of the causes for poverty.  The three sets of statistics are compiled by taking into account different government policies and measures (listed below).  Through comparing these statistics with the corresponding pre-intervention statistics (e.g. difference between the post-intervention and pre-intervention poverty rates), the effectiveness of the policies can be assessed.
(a)    recurrent cash and in-kind benefits (mainly public rental housing)
(b)    recurrent cash and non-recurrent cash benefits
(c)    recurrent cash benefits
When compiling the three sets of statistics, taxes are deducted so as to more accurately reflect the actual household income.
 

Glossary of Terms

Term
Definition
Domestic households
Refer to a group of persons who live together and make common provision for essentials for living. These persons need not be related. If a person makes provision for essentials for living without sharing with other persons, he / she is also regarded as a household. In this case, it is a 1-person household. Foreign domestic helpers are excluded from all the domestic households. Households comprising only non-Hong Kong residents or Mobile Residents are not classified as domestic households.
CSSA households
Refer to domestic households that receive Comprehensive Social Security Assistance (CSSA).
Elderly households
Refer to domestic households with all members aged 65 and above.
Single-parent households
Refer to domestic households with at least one widowed, divorced, separated or never married member living with child(ren) aged below 18.
New-arrival households
Refer to domestic households with at least one member who is One-way Permit Holder and has resided in Hong Kong for less than seven years.
Households with children
Refer to domestic households with at least one member aged below 18.
Youth households
Refer to domestic households with all members aged 18 to 29.
Economically active households
Refer to domestic households with at least one member who is economically active.
Economically inactive households
Refer to domestic households with all members being economically inactive.
Unemployed households
Refer to domestic households with all economically active members being unemployed.
Working households
Refer to domestic households with at least one employed member.
Households in public rental housing
Refer to domestic households residing in public rental housing.
Private tenant households
Refer to domestic households renting and residing in private permanent housing or temporary housing.
Owner-occupier households
Refer to domestic households which own the subsidised sale flat, private permanent housing, or temporary housing that they occupy.
Households in other types of housing
Include domestic households which reside in rent-free or employer-provided accommodation.
Households with head aged 18-64
Domestic households with household head aged 18 to 64.
Households with head aged 65 and above
Domestic households with household head aged 65 and above.
Demographic dependency ratio
Refers to the number of persons aged below 18 (youth and child dependency ratio) and aged 65 and above (elderly dependency ratio) per 1 000 persons aged 18 to 64.
Economic dependency ratio
Refers to the number of economically inactive persons per 1 000 economically active persons.
Economic activity status
Households / population can be classified into two main groups: economically active and economically inactive.
Monthly household income
The total income earned by all member(s) of the household in the month before enumeration. Household income in the poverty line framework can be divided into the following four types:
(i) Pre-intervention;
(ii) Post-intervention (recurrent cash);
(iii) Post-intervention (recurrent cash + non-recurrent cash); and
(iv) Post-intervention (recurrent cash + in-kind).
Pre-intervention
This income type only includes household members' employment earnings, investment income, and non-social-transfer cash income. In other words, the income is pre-tax income with all cash benefits excluded.
Post-intervention (recurrent cash)
Refers to the household income after tax, including all recurrent cash benefits received.
Post-intervention (recurrent + non-recurrent cash)
Refers to the household income after tax, including both recurrent and non-recurrent cash benefits (including one-off measures) received.
Post-intervention (recurrent cash + in-kind)
Refers to the household income after tax, including recurrent cash benefits and in-kind benefits monetised as part of income received.
Policy intervention measures
According to the discussion of Commission on Poverty, policy intervention measures can broadly be classified into four types:
(i) Taxation;
(ii) Recurrent-cash benefits;
(iii) Non-recurrent cash benefits; and
(iv) In-kind benefits.
Taxation
Includes salaries tax and property tax, as well as rates and government rents paid by households.
Recurrent cash benefits
Refer to cash-based benefits / cash-equivalent supplements recurrently provided by the Government to individual households, such as social security benefits and education allowances in cash.
Non-recurrent cash benefits
Refer to non-recurrent cash benefits provided by the Government, including one-off measures. Cash measures provided by the Community Care Fund are also included.
In-kind benefits
Refer to in-kind benefits provided with means tests. The provision of public rental housing by the Government is the major in-kind benefit.
Persons
Refer to those persons residing in domestic households (excluding foreign domestic helpers).
Economically active persons
Synonymous with the labour force, comprise the employed persons and the unemployed persons.
Economically inactive persons
Include all persons who have not had a job and have not been at work during the seven days before enumeration, excluding persons who have been on leave / holiday during the 7-day period and persons who are unemployed. Persons such as home-makers, retired persons and all those below the age of 15 are thus included.
Employed persons
For a person aged 15 or over to be classified as employed, that person should:
(i) be engaged in performing work for pay or profit during the seven days before enumeration; or
(ii) have formal job attachment (i.e. that the person has continued receipt of wage or salary; or has an assurance or an agreed date of return to job or business; or is in receipt of compensation without obligation to accept another job).
Full-time workers
Refer to employed persons who work 35 hours and over during the seven days before enumeration, or those who work less than 35 hours due to leave during the 7-day period.
Part-time workers
Refer to employed persons who work less than 35 hours during the seven days before enumeration, excluding those who work less than 35 hours due to leave during the 7-day period and those underemployed.
Underemployed persons
The criteria for an employed person to be classified as underemployed are: involuntarily working less than 35 hours during the seven days before enumeration and either
(i) has been available for additional work during the seven days before enumeration; or
(ii) has sought additional work during the 30 days before enumeration.
Working short hours is considered involuntary if it is due to slack work, material shortage, mechanical breakdown or inability to find a full-time job. Following this definition, employed persons taking no-pay leave due to slack work during the seven days before enumeration are also classified as underemployed if they work less than 35 hours or are on leave even for the whole period during the 7-day period.
Unemployed persons
For a person aged 15 or over to be classified as unemployed, that person should:
(i) not have had a job and should not have performed any work for pay or profit during the seven days before enumeration; and
(ii) have been available for work during the seven days before enumeration; and
(iii) have sought work during the 30 days before enumeration.
However, if a person aged 15 or over fulfils conditions (i) and (ii) above but has not sought work during the 30 days before enumeration because he / she believes that work is not available, he / she is still classified as unemployed and is regarded as a "discouraged worker".
Notwithstanding the above, the following types of persons are also classified as unemployed:
(i) persons without a job and who have sought work, but have not been available for work because of temporary sickness; and
(ii) persons without a job and who have been available for work, but have not sought work because they:
• have made arrangements to take up a new job or to start business on a subsequent date; or
• are expecting to return to their original jobs (e.g. casual workers are usually called back to work when service is needed).
Household head
A household head is acknowledged by other family members. Generally speaking, the household head should be responsible for making major decisions for the household.
Unemployment rate
Refers to the proportion of unemployed persons in the labour force.
Median
For an ordered data set which is arranged in ascending order (i.e. from the smallest value to the largest value), the median is the value that ranks in the middle of all data in the set. If the total number of data is an odd number, the median is the middle value of the ordered data set. If the total number of data is an even number, the median is the average of the two middle values of the ordered data set.
Percentiles
Percentiles are the 99 values that divide an ordered data set into 100 equal parts (in terms of the number of observations). In brief, the pth percentile is the value which delineates the lowest p% of all the data, where p can be any integer value from 1 to 99.
Poverty indicators
Quantitative measurements of poverty.
Poverty incidence
Refers to the number of poor households and the corresponding number of persons living therein (i.e. the poor population), with monthly household income less than the poverty line corresponding to the household size.
Poverty rate
The ratio of the poor population to the total population living in domestic households.
Poverty gap
Poverty gap of a poor household refers to the difference between a household's income and the poverty threshold. The total poverty gap is the sum of all such differences over all poor households. The total poverty gap divided by the number of poor households is the average poverty gap.
Poverty line
A threshold to define poor households and their population. In the poverty line framework, 50% of the median monthly household income before policy intervention by household size is adopted as the poverty line.