DTIS, Volume I - Enhanced Integrated Framework (EIF)

A. HOUSEHOLD INCOMES
As can be seen from Table 4.1, household incomes are growing rapidly, however, with
much higher growth in Male’ compared to the atolls. This implies that income inequality
between Male’ and the atolls is increasing, and that vulnerability is acute in remote areas.
However, both within Male’ and within the atolls the median household income is
growing faster than the mean income. This is an indication that inequalities within Male’
and within the Atolls are declining over time.
Table 4.1
Household (hh) incomes and growth (in constant 1995 Rf.)
Male’
Atolls
1997 2004 1997 2004
Rf. US$ Rf. US$ Rf. US$ Rf. US$
Mean hh expenditures (PPP/day) 34 7.5 57 12.3 19 4.1 26 5.6
Growth rate % 7.7 4.6
Median hh expenditures (PPP/day) 26 5.7 49 10.6 15 3.2 21 4.5
Growth rate % 9.5 5.4
Note: The US$ equivalents are corrected for inflation since 1993. The 1997 international dollar PPP exchange rate is
Rf. 4.56 and in 2004 remained practically unchanged at Rf. 4.63
Source: VPA-2
Although it is interesting to assess the poverty gap at island and atoll levels, the VPA
team considered the sample sizes too small to identify statistically reliable relationships. 25
Hence, a poverty gap analysis was carried out at the regional administrative level of
which there are five plus the Male’ capital area. The main finding was that that average
household incomes are growing in all regions of the country. In the two southern regions,
per capita household income has grown by more than 50 per cent during the seven-year
period from 1997 to 2004. There is also a north-south pattern in regional disparities with
households getting richer going from north to south. Average household income per
capita is lowest in the north and increases gradually ending with the highest average per
capita household incomes in the south.
For the Northern Region, VPA-2 calculated that 7.7 per cent of the population of the
region lives on less than Rf. 7.5 per person per day, with an average expenditure of Rf.
5.3 per person per day, implying a shortfall of 29% towards the Rf. 7.5 poverty line, so
that the poverty gap ratio is 2.2 per cent (7.7 per cent*29 per cent), see table 4.2 for
similar poverty gap calculations per region.
25 VPA-2 definition: The poverty gap takes both the incidence and the depth of poverty into account. It counts not only
the number of poor, but also considers how poor the poor are. The poverty gap ratio is defined as the product of the
proportion of the population below a certain poverty line and the average income shortfall of the poor to the poverty
line as a proportion of the poverty line.
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