How is the PPI made?

How is the PPI made?

The development and update of every PPI is coordinated by the PPI team and includes the input of a variety of stakeholders. The PPI team tests every PPI in the field and creates supporting documentation in the interest of transparency.

The questions, responses, and weights on the PPI scorecard and look-up table are derived from each country’s most recent national household expenditure or income survey. These surveys typically contain 200 to 1000 questions. Of these, ten questions are derived for the PPI scorecard, based on a balance of the following criteria:

  1. The question has a strong correlation with poverty, i.e., there is statistical significance that households who answered the question a certain way are below the poverty line. Example: “What is the level of education attained by the head of the household?” 
  2. The question is inexpensive to collect, easy to answer quickly, and simple to verify. Example: “Of what material is the roof of the residence made?”
  3. The question is liable to change over time as poverty level changes. Example: “Does the household own a motorbike or car?”

After the scorecard questions are selected, the scoring system is developed so that the lowest possible score is 0 (most likely poor) and the highest is 100 (least likely poor). Each PPI scorecard is published with a Design Documentation Memo. Read this document for your country’s PPI for a detailed account of how the PPI was made and why it is statistically sound.