Prosperity Initiative seeks to improve the lives of people defined as poor or near poor in terms of their income or their cost of living and consumption.

At present, we use national poverty lines as the primary way to measure our poverty impact. While we also target and measure jobs created, we place most emphasis on income going to the poor. In the future, we will also measure our impact on poverty as defined in Millennium Development Goal 1 (MDG1) - the eradication of extreme poverty and hunger.

Prosperity Initiative's primary measures of impact potential and overall outcome include two main concepts:

• Headcount poverty reduction, which measures the numbers of people moving across defined poverty lines and
• Poverty Gap, the measure of the average distance of the population of poor people below a formally defined poverty line. Changes in the poverty gap provide a more complete measure of the change in the living standards of poor people.

This is demonstrated in one of our cases, the NW Viet Nam industrial bamboo market system, where we are targeting a population of 400,000, of whom 280,000 are poor. The impact on poverty will come mainly through the mechanism of price rises and increasing raw bamboo sales by smallholders. We estimate that 21,000 people have already moved over the poverty line through increased bamboo incomes. As bamboo price moved from $12/tonne to $14/tonne from the end of 2004 to end 2006, smallholders in the target group increased their incomes from $11.4M/yr to $15.1M. The increase in bamboo incomes was associated with a decrease in the poverty gap from 30.9% to 27.4% for the target poor population. In household income terms, this meant that the income shortfall that would be required bring poor households up to the poverty line had reduced from $11.9M to $9.9M (in 2006 dollar terms). Our survey work shows that bamboo was the major contributor to income growth and that other income sources were falling during this period.

Importantly, what we also show is that as the farm-gate price in Viet Nam increases towards the 80% of the current farm-gate price in the China industry, close to $86M smallholder income would be created (up from $11M in 2004). This will reduce the poverty gap to 12% across the population (or $1.8M). This would take around 180,000 people across the national poverty line (baseline 2004) assuming all other income segments remain relatively flat. In upland Viet Nam, where economic opportunities are based on livestock and crops, this is a reasonably likely scenario but one that will of course be influenced by global market commodity trends. Bamboo, as an input to a value-added industry and as a large segment of income for this population, therefore creates an important buffer to other commodity price fluctuations for the poor.

Poverty is of course more complicated than simply measuring whether someone crosses a poverty line. Accordingly, Prosperity Initiative is gearing up to focus on two specific groups of poor people:

• those who fall below the line classified as poor and
• those vulnerable to falling below the poverty line who lie just above it, classified as near poor.

We are also developing measures for assessing poverty that do not rely on standard income/expenditure measures, and as our projects develop, we will map the trajectories of target populations to capture the paths out of poverty provided by market based economic growth created by our work.
Prosperity Initiative will disaggregate the above measures by gender, ethnicity and other social variables and already has made steps towards this in its pilot impact work.

2008 Thanh Hoa Bamboo Impact Assessment Report (pdf, 772kb)