Disability-Inclusive Poverty Measurement: Adjusting Monetary Lines Through Equivalence Scales in Peru

Approximately 16 per cent of the global population lives with a disability. Although there are no definitive figures, it is certain that a higher proportion of people with disabilities are poor compared with people who are living without disabilities. In the case of monetary poverty, evidence for their levels of poverty is not conclusive; however, it is well known that people with disabilities face direct and indirect costs associated with their condition, and therefore their levels of income and consumption are lower in comparison with those of persons without disabilities; but in some cases, monetary poverty lines do not capture those differences. This study aims to analyse the levels of poverty of people with disabilities after computing an equivalence scale to capture the needs of people with disabilities and their families. To achieve this objective, we used the Income and Expenditures Survey 2022 (ENAHO-2022) from Peru. We first tested whether the current poverty line in Peru captures the needs of people with disabilities. Then we analysed the consumption patterns of households with and without members with disabilities. Finally, we proposed to adapt the national poverty line for Peru using an equivalence scale that captures the extra costs of living with a disability in Peru. Using this equivalence scale, we recalculated the poverty rate for households with disabilities. The results revealed that the presence of a member with a disability in the household reduces household income and consumption. The estimation of the equivalence scale showed that a household of one member was equivalent to a household with two members without disabilities. When recalculating the incidence of poverty, the percentage of households with disabilities living in poverty increased from 35% to 50% or 760,000 people with disabilities and their families became poor.