Minimum Expenditure Baskets - Interim guidance note WFP VAM | Food Security Analysis
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MINIMUM EXPENDITURE BASKETS
Minimum Expenditure Baskets
Interim guidance note
WFP VAM | Food Security Analysis
1
July 2018MINIMUM EXPENDITURE BASKETS
2MINIMUM EXPENDITURE BASKETS
MINIMUM EXPENDITURE BASKETS
©July 2018, World Food Programme (WFP), Vulnerability Analysis & Mapping Unit (VAM).
All rights are reserved. Reproduction is authorized, except for commercial purposes, provided that WFP is acknowledged as
the original source.
United Nations World Food Programme
Via Cesare Giulio Viola 68/70, Parco de’ Medici 00148, Rome – Italy
Arif Husain
Chief Economist and Director - Analysis and Trends Service (OSZA)
Tel: + 39 06 6513 2014 - e-mail: arif.husain@wfp.org
3MINIMUM EXPENDITURE BASKETS
Contents
Aim and scope ..................................................................................................................................... 5
Why a MEB? ........................................................................................................................................ 5
What is a MEB? ................................................................................................................................... 5
Should national poverty lines be used for establishing MEBs? ........................................................... 7
What data are needed to construct a MEB? ....................................................................................... 8
How to construct a MEB...................................................................................................................... 9
How to construct a survival minimum expenditure basket (SMEB) .................................................. 21
How to find a proxy for a MEB when data or time is insufficient ...................................................... 21
Questions or comments? .................................................................................................................. 22
ANNEX 1 .............................................................................................................................................. 23
ANNEX 2 .............................................................................................................................................. 33
4MINIMUM EXPENDITURE BASKETS
Aim and scope
This guidance note explains the basic steps for constructing a minimum expenditure basket (MEB).
This is a living document that will continue to be updated as more experience is gathered in calculating
and using MEBs. MEBs are often constructed in an interagency context where WFP has limited or
partial influence on the content. The purpose of this guidance is to provide conceptual clarity and best
practices, relying on experience both from the humanitarian and the development field. The aim is to
equip WFP staff with what they need when constructing a MEB, whether this takes place in an
interagency forum (most likely the Cash Working Group) or is done by WFP on its own. Because the
interagency context is the most common one, the guidance cannot be completely prescriptive but
needs to allow for some flexibility in its recommendations.
Why a MEB?
MEBs were originally constructed primarily to identify the percentage of households in a target
population who are poor, i.e., cannot meet their essential needs. For WFP, a MEB is useful in a variety
of operations but particularly where the organization responds with cash-based transfers (CBT) to
meet food needs or a broader set of essential needs through a multisector cash or a multipurpose-
cash intervention.1 The MEB can help to achieve the following:
✓ support decisions on transfer value amounts for food and non-food needs, including
supporting multi-sector coordination (government, partners and donors);
✓ support population profiling, and in some cases targeting, for multi-sector/multipurpose cash
interventions by identifying the characteristics of those who cannot meet their essential
needs;
✓ inform decisions on which goods and services to assess in a supply assessment;
✓ monitor immediate and longer-term food security and resilience outcomes by analysing
expenditure trends relative to the MEB; and
✓ establish a relevant basket against which to monitor market prices and the cost of living.
What is a MEB?
A MEB is defined as what a household requires in order to meet their essential needs, on a regular
or seasonal basis, and its average cost. Essential/basic needs are defined as essential goods, utilities
and services required by households to ensure survival and minimum living standards.2 The monetary
threshold established is equivalent to a poverty line. The households whose expenditures fall below
this threshold are defined as households who cannot meet their essential needs. The costs of basic
needs approach, or establishing a MEB, is fairly new in humanitarian contexts; however, it has long
been the most common way to construct national poverty lines.3 Hence, there is often national
experience to draw on.
1 Multisector cash refers to a coordinated approach with traditional sector-specific interventions to deliver unrestricted or
restricted cash transfers that cover the needs of a household (such as food, water, shelter, livelihood, etc). Multipurpose
cash refers to unrestricted cash transfers corresponding to the amount of money a household needs to cover fully or partly
a set of basic needs, regardless of the sector they belong to. These include, but are not exclusive to, one-agency
interventions.
2
CaLP / DRC/ Mercy Corps / Save the Children / OCHA (2018). Guidance and Toolbox for Basic Needs Assessment.
Available at http://www.cashlearning.org/downloads/East%20and%20Central%20Africa%20CVTWG/basic-needs-
assessment-guidanceoct17-3.pdf
3 Haughton and Khandker (2009). World Bank Handbook on Inequality and Poverty. Available at
http://siteresources.worldbank.org/PGLP/Resources/PovertyManual.pdf
5MINIMUM EXPENDITURE BASKETS
A MEB does not necessary equate to all the essential needs of a household. It is only supposed to
capture needs that the household has to cover entirely or partly through the market. For example, in
contexts where electricity is considered an essential need but not available for the target population,
it cannot be included in the MEB. If shelter is provided in a refugee camp, or public education is
provided, these are not captured in the MEB.
The choice of a MEB is always somewhat arbitrary. As the World Bank Handbook for Poverty and
Inequality outlines, the starting point for establishing a MEB is to estimate the cost of acquiring enough
food to meet energy requirements, usually 2,100 calories per person per day, as is the typical
threshold also used by WFP. The cost of other essential needs is then added. This can be done using
two different approaches or a combination of both: 1) an expenditure-based approach focusing on
effective demand; and/or (2) a rights-based approach based on assessed needs. While the
expenditure-based approach is used for most national and international poverty lines, the rights-
based approach is the principal method followed in the multipurpose cash grants (MPG) guidance
developed for humanitarian purposes.4 Essential needs in humanitarian contexts is understood to
imply access to full rights as defined by international humanitarian law. According to the MPG
guidance, the International Humanitarian and Human Rights Law protects the right of crisis-affected
persons to food,5 drinking water, soap, clothing, shelter and life-saving medical care. Humanitarian
Sphere Standards builds on this definition, adding basic sanitation, contagious disease prevention and
education.6
A MEB is not equivalent to a transfer value – although a MEB is a critical factor when determining
transfer values. This distinction is important because a MEB remains the same regardless of assistance
and funding constraints.7 Most households have their own resources to meet some of their essential
needs, so the transfer value will usually be less than the MEB value, covering the gap between own
resources, other assistance received and the MEB. The module on Operationalization discusses the
gap analysis in more detail.
A MEB aims to capture minimum essential needs for average households. It does not account for
additional requirements of distinct groups such as pregnant and lactating women, infants, young
children, adolescents, the elderly, people living with disabilities, and people with chronic diseases.
To estimate impacts of an intervention, the MEB threshold should not be changed over time. The
threshold should only be adjusted for price changes.
A MEB aims to mainly capture recurrent, regular needs of households. It does not strive to capture
ad hoc costs. This can be challenging, particularly in emergency situations when needs are dynamic.
4 UNHCR, CaLP, DRC, OCHA, Oxfam, Save the Children, WFP. Operational Guidance and Toolkit for Multipurpose Cash
Grants. See http://www.cashlearning.org/mpg-toolkit/
5
Defined as energy needs, not considering full nutrient needs (protein, vitamins, minerals etc).
6 Ibid.
7
Note that a distinction is made between needs that are met by public provision (for example free primary education), and
temporary assistance (for example an emergency safety net provided by the government). Why the needs for the former
should not be included in the MEB, the needs for the latter should (and then be accounted for in the gap analysis).
6MINIMUM EXPENDITURE BASKETS
While this guidance advocates for keeping the MEB fixed to the extent possible, in such situations it
might be justified to first create an interim MEB (see section How to find a proxy for a MEB when data
or time is insufficient) and when the situation has stabilised, a final one. A similar challenge also
concerns needs that are inherently irregular, large and unpredictable, such as health needs. We return
to this below where specific needs are discussed.
Should national poverty lines8 be used for establishing MEBs?
Can we not simply rely on national MEBs? Most countries have their own poverty lines to identify the
poor so why not use this poverty line? Whenever possible, the first choice should be to align with
government practices. However, this is not always feasible, for three main reasons:
✓ Practices vary widely when it comes to constructing poverty lines. Although MEBs are the most
common approach, sometimes poverty lines are set as a share of mean/median income or
expenditures or as a fixed percentage of the income or expenditure distribution (although mostly
not applicable in low income countries). Sometimes countries exclude non-food items from their
MEB. Countries can also have different poverty lines for different purposes.
In Zambia, the national poverty line is constructed using the MEB approach based on a simple
food basket that meets minimum food needs for a family of six. Imagine this food basket is
deemed to cost US$100 per month. This is defined as the food poverty line. To construct the
full poverty line, the minimum non-food needs of households are estimated based on the
average share of expenditure that households just above the food poverty line dedicate to
needs other than food. Let’s say that this corresponds to US$35 per month. The total poverty
line is then the sum of the food and non-food lines, which with our hypothetical figures would
be US$100 + US$35 = US$135.
By contrast, Turkey uses the standard EU approach to measuring poverty, i.e. 50 or 60 percent
of median income. However, eligibility for social assistance is based on the household income
gap from the national minimum wage.
✓ The target population can be different from the country population and they may have different
essential needs because they live in refugee camps or do not have access to the same services as
the resident population (for example, public education).
✓ The data that WFP typically can collect through Comprehensive Food Security and Vulnerability
Analysis (CFSVAs), Emergency Food Security Assessments (EFSAs), baseline assessments and Post
Distribution Monitoring (PDMs) are often much less detailed than the Household Budget Surveys
or Living Standard Measurement Surveys used to calculate national MEBs. It is widely observed
that the more detailed the questions about expenditures, the higher the reported expenditures.9
8 National poverty lines should not be confused with the international (World Bank-defined) poverty line of US$1.90/day.
While the former is defined nationally, the latter is a uniform poverty line that can be applied anywhere in the world.
9 Haughton and Khandker (2009). World Bank Handbook on Inequality and Poverty. Available at
http://siteresources.worldbank.org/PGLP/Resources/PovertyManual.pdf
7MINIMUM EXPENDITURE BASKETS
If the poverty line is constructed using detailed data but the assessment of household needs
relative to the poverty line is based on less detailed data, errors in the assessment are likely to
occur. Also, WFP surveys do not allow for calculation of depreciation of assets which often are
accounted for when calculating national poverty lines.
Even if the national poverty line cannot be used in the vast majority of cases, especially in
humanitarian contexts, elements of the methodology can be replicated. Thus, it is important to know
how the national poverty lines are constructed.
How about using the weights applied in consumer price indices (CPI)? In most countries, household
budget survey data is used to construct the underlying baskets through which consumer prices are
measured. A weight that corresponds to average household expenditure patterns is applied to each
component in the CPI.10 This basket is not ideal for MEB calculations because it corresponds to average
consumption patterns. MEB calculations are based on the consumption levels and patterns of those
households who are just able to meet their essential needs.
What data are needed to construct a MEB?
Ideally, all of the following should be available:
✓ a representative household survey of the target population such as an EFSA, a CFSVA or a pre-
assistance baseline survey with an expenditure module that includes food and non-food
expenditures (including non-purchased items from own production);11 a good-quality PDM survey
can also be used but with care, as expenditure patterns may change once households receive
assistance;
✓ focus group discussions with key informants and the target population;
✓ price data series covering the intervention area for food items included in the food basket and
price data on key non-food items and services; and/or
✓ price indices from national statistical offices (national data and data collected by WFP and partners
can be complementary); and
✓ data based on national Household Budget Surveys or Living Standard Measurement Surveys.
10The CPI weights are mostly available through national statistical offices.
11In WFP surveys, the CARI module is recommended for the MEB. Please look at the module on Essential Needs
Assessments in the Essential Needs Guidance package for more information on data requirements.
8MINIMUM EXPENDITURE BASKETS
What if data using a Household Economy Approach is available? The Household Economy
Approach (HEA) developed by Save The Children is a commonly adopted approach for analyzing
food security and livelihoods. It is based on understanding how households normally access
income, food and other items/services for survival, established through a baseline analysis. As part
of the baseline, the HEA defines livelihood zones where households share similar strategies for
obtaining food and income. It also distinguishes households within these livelihood zones in at least
three (commonly four and sometimes more) wealth groups. The HEA baseline quantifies the
sources of food and income, as well as the expenditure patterns for each wealth group and
livelihood zone. The information collected on expenditures can be used as a data source for
calculating an MEB. However, due to the relative nature of the wealth cut-offs used, there is no set
standard on which group should be the reference for the MEB. If HEA data is utilized, it is important
to understand how it was collected – the HEA is simply an analytical framework, not a set method
of data collection. Thus, while HEAs are often conducted through qualitative methods (e.g. focus
group discussions), they may also be based on quantitative modules in household surveys. The
latter yields more rigorous information, however qualitative data can nonetheless be used - but
should be cross-checked/triangulated with other sources.
How to construct a MEB
A MEB is constructed by first estimating the cost of acquiring adequate food, then adding the cost
of other essential non-food expenditures. The two principal methods used are the expenditure-based
approach and the rights-based approach relying on assessed needs. This guidance argues that while
both approaches are viable, depending on the context and the purpose of the MEB, the preferred
method should combine elements of both.
Box 1: Checklist for constructing a MEB
➢ Identify a food basket
➢ Add a non-food component
➢ Adjust for regional or urban/rural price differences if needed
➢ Consider accounting for differences in household size and
composition
➢ Consider seasonal variations, if significant
➢ Validate with stakeholders
Expenditure-based MEB
Establishing a MEB based on household expenditure data requires calculating the minimum cost of
living for households right above the threshold that corresponds to the minimum amount needed to
meet essential needs. Including households below this threshold would lead to a basket that does not
satisfy essential needs, while including relatively richer households would lead to the inclusion of non-
essential needs and therefore inflate the MEB. But what is just enough?
In non-humanitarian contexts when the poverty line is based on extensive household surveys, the
calorie intake of each household can be calculated. In this case, the ‘poor’ are typically identified as
those consuming 2,000-2,200 kcal per person per day, i.e. around 2,100 kcal, or below. In
humanitarian contexts, the level of detail required to calculate individual calorie intake is not available
9MINIMUM EXPENDITURE BASKETS
in the surveys used (CFSVAs, EFSAs and pre-intervention baselines) so we need other ways to identify
the cohort of households who are just able to meet their needs. This is perhaps the most challenging
part of constructing a MEB. How this is done depends on the characteristics of the underlying
population and the available data. Below we outline some typical cases:
1. No assistance is present, most households are poor but there are households in the population
who are able to meet their essential needs: use the expenditures of households with an
acceptable Food Consumption Score12 combined with the criterion that they do not use
negative coping strategies (or have a high coping strategy index). Triangulation with other
variables such as dwelling quality, asset index or expenditure quintile groups is useful.
2. Households already receive food assistance: to the extent possible, avoid using indicators that
are highly influenced by assistance (or such indicators only). For example, in the presence of
food assistance, the Food Consumption Score of some poor households might be acceptable.
From a holistic essential needs perspective, these households might still be unable to meet
their essential needs by themselves and should not be used as reference households when
establishing the MEB. In this case dwelling quality, asset index or other similar indicators can
also be useful.
3. The majority of the households are very poor and vulnerable so the cohort of households who
can meet their basic needs is not big enough to construct a MEB: use a rights-based approach.
If survey data is available, make a reality check using these data (and focus group discussion)
to understand household consumption patterns.
4. There is a large spread in the target population in terms of well-being: exclude expenditure
quintile groups 1 and 5 combined with additional criteria such as acceptable Food
Consumption Score, no negative coping and dwelling quality.
The reference food basket is then established corresponding to the main consumption patterns of the
population “just able to meet their essential needs”.13 Once the basket is established, it has to be
priced using local food price data to estimate the total value of this food basket. ANNEX 1 includes an
example from Kinshasa on how to construct approximate food baskets from data typically collected
by WFP. If the target population is part of and similar to the population living in the country, the
reference basket (in terms of actual food items) used for the national poverty line can be used, if
available and on the condition that it corresponds to data that WFP collects or has access to through
the government and/or partners.
The reference basket used for the national poverty line in Zambia includes specified quantities of
maize meal, cooking oil, salt, beans, groundnuts, onions, tomatoes, other vegetables, kapenta,
bream, milk and salt. WFP collects prices on maize and maize meal, cassava meal, millet, beans
and groundnuts. To be able to use the national reference basket, prices for some of the food items
have to be obtained from other sources or additional data has to be collected.
12 The FCS is a composite score based on dietary diversity, food frequency, and the relative nutritional importance of
different food groups. For more information, see
http://documents.wfp.org/stellent/groups/public/documents/manual_guide_proced/wfp271449.pdf?_ga=2.12586487.11
6493132.1499950460-1472687100.1410256493
13 If desired NutVal can be used to set the quantities as per recommended macro nutrient proportions.
10MINIMUM EXPENDITURE BASKETS
Once the food component has been established, a non-food component should be added. There is no
wholly satisfactory way to add a non-food component as it is difficult to define what a basic minimum
is. Unlike food needs, non-food needs cannot be anchored to a specific threshold, such as 2,100 kcal
per person per day. The simplest approach is to add a specific allowance for non-food expenditures
by using the average food expenditure share in the total expenditures of the population “just able to
meet their essential needs”. The total MEB then consists of a food component and a non-food
component.
A hypothetical MEB could be calculated as follows (figures are per capita per month):
➢ food component = cost of reference food basket = US$20
➢ food expenditure share in total expenditures for those “just able to meet their essential needs”
= 60 %
➢ overall poverty line (MEB) = US$20/0.60 = US$33.3
➢ non-food component = US$13.3
However, the survey data can also be used to identify specific non-food needs. The precise non-food
components can vary slightly by context but would generally include the components discussed in the
section on the rights-based MEB below. Care should be taken when it comes to underreporting of
expenditures and treatment of expenditures that are irregular in nature. If a MEB is constructed from
survey data, not only household expenditures but also purchase/payment on credit needs need to be
taken into account, particularly if indebtedness is very prominent in the target population. The ENA
module of the Essential Needs guidance package discusses in more detail how to deal with questions
on debts in the survey. Care has also to be taken when estimating MEBs from survey data for
predominantly rural populations engaged in subsistence farming, as food expenditures can be
underestimated, if non-purchased food is not properly estimated and valued. Shelter is a particularly
tricky component to treat for sedentary urban populations. If households own their dwelling and they
do not pay rent, they might be classified as poor just because they do not have any major shelter
expenditures. The module on Operationalization discusses these two issues in the section on gap
analysis. ANNEX 1 demonstrates how choices were made in Kinshasa when it comes to non-food
expenditures. It is essential to validate the choices made through partner and beneficiary consultation.
Rights-based MEB
As noted above, in humanitarian contexts the ‘basic needs’ approach has been understood to imply
access to full rights as set out by international humanitarian law and the Humanitarian Sphere
Standards. The term ‘rights-based MEB’ is derived from this understanding. Generally, these rights
comprise access to food, shelter, utilities, non-food items and services (including health, education,
transport and communication). Sometimes residency/legal documentation is also included. This
exercise is often done by the Interagency Cash Working Group, and each sector contributes with their
sectoral needs. In such a case WFP is responsible for defining the food component.
The rights-based approach is essentially to define a detailed list of food and non-food needs and price
them. The list is typically produced through focus group discussions with the target population,
11MINIMUM EXPENDITURE BASKETS
partners and key informants. The pricing/costing is mainly done based on actual market prices, but
sometimes household expenditure data are also used.
Food
To construct the food basket for a rights-based MEB, the WFP Cash and Voucher Manual offers good
starting points:14 a CBT transfer value should correspond to a nutritionally balanced minimum food
basket from the market, adapted to locally preferred diets and ensuring access to macro- and micro
nutrients in addition to adequate calorie intake. Thus, in comparison to the expenditure-based
approach, the rights-based MEB recommends “a nutritionally balanced basket”, while the expenditure
based MEB just relies on actual consumption patterns. Despite this conceptual difference, it is still
important to recall that also a rights-based MEB is supposed to cover minimum essential needs only,
rather than reflect an ideal situation.15
Shelter
This is the cost of accommodation that meets basic shelter needs and rights. What this means in
practice will depend on the context, driven for example by weather conditions and what is realistically
available to the populations (for example, displaced people in northern Nigeria versus Syrian refugees
in Turkey where winters are cold).
For the Syrian refugee operation in Turkey, the MEB includes the costs of a shelter that meets certain
standards, such as a minimum of 3.5 m2 per person, access to a toilet and running water.
Utilities
These include the cost for basic utilities such as safe drinking water and, depending on the context,
electricity. Cooking gas/fuel is often included in non-food items.
Non-food items
These reflect basic household needs for cooking, clothing, hygiene and general household items. The
recommendation here is to focus on recurrent needs, even if in some contexts also one-off needs are
included. The precise list has to be defined in consultation with beneficiaries, partners and the
government. In practice, these lists can look very different (see examples in Tables 1 and 2). In some
refugee contexts, UNHCR has already defined lists of specific items, which can be taken into account
for the MEB.
14
Available at http://documents.wfp.org/stellent/groups/public/documents/newsroom/wfp274576.pdf
15
A tool that can be used to estimate the costs of meeting nutrient requirements of a household composed of different
members based on composition and prices of locally available foods is the Cost of the Diet (CotD) that has been developed
by SC-UK and used by WFP’s ‘Fill the Nutrient Gap’ team of the Nutrition Division. The CotD uses linear optimization and
takes needs for 16 different nutrients into consideration. However, it is important to note that the cost of a diet that meets
all nutrient needs of a household’s different members costs typically 50-100 percent more than a diet that meets energy
needs and hence might not correspond to actual consumption patterns of poor people.
12MINIMUM EXPENDITURE BASKETS
Table 1 shows an example list of non-food items from the refugee operations for Syrians in Turkey. A
similar list for Kakuma refugee camp in Kenya is in Table 2.
Table 1: Non-food items included in the refugee operations for Syrians in Turkey
Quantities per HH
Type Product (of 6 pax) per
month
Hygiene Toilet paper 24 rolls
Hygiene Toothpaste 4 tubes/ 100ml
Hygiene Toothbrush 6 toothbrushes
Laundry
Hygiene 1.5kg
detergent
Liquid dish
Hygiene 750ml
detergent
6 packets of 10 pads
Hygiene Sanitary napkins
per packet
Hygiene Individual soap 12 pieces of 125g
Disinfectant /
Hygiene 500ml
cleaning fluid
Hygiene Shampoo 650ml
Hygiene Diapers 88 per packet
Clothes &
Other N/A
household items
Cooking
LPG Bottle 12kg bottle
gas
Note: Non-food items were defined to include only recurrent needs (per month per six-person household)
Source: Hobbs (2016). MEB/SMEB calculation for Syrians living in Turkey, September 2016. Report
commissioned by the Cash-Based Interventions Technical Working Group in Turkey.
Table 2: Non-food items specified by UNHCR for Kakuma refugee camp in Kenya (per capita) cover both
one-off and recurrent needs
Quantities per
Type Products
capita/household
Hygiene Soap 250 mg (per month)
one piece (per 2
Cooking Kitchen set
years)
one piece (per 2
Other Mosquito net
years)
20-litre rigid one piece (per 6
Other
plastic Jerry can months)
Synthetic
Other one piece (per year)
sleeping mat
Other Woollen blanket one piece (per year)
Source: Kimetrica (2016). Refugee Household Vulnerability Study: Kakuma refugee camp
Services
This includes costs to access basic services such as healthcare, education, transport and
communication.
13MINIMUM EXPENDITURE BASKETS
Healthcare costs are difficult to estimate since they are inherently irregular, large and unpredictable.
Typically, however, the rule of thumb is that only basic minimum needs are covered, such as two visits
per year to the doctor; sometimes expenses for critical events, deliveries, baby kits and medicines are
also included. Again, it is worth emphasizing that even if a need is not covered by the MEB, it doesn’t
mean that these needs don’t need to be met.
Education costs cover school fees, materials, uniforms and transport, depending on what households
have to pay themselves and what is publicly available.
Transport and communication needs are often specified as the average transport and communication
costs from household surveys and then validated with the communities; communication needs can
also be specified as the cost of a SIM card with a specific amount of data per household per month.
Overcoming some challenges: constructing a hybrid MEB
These two different approaches have advantages and disadvantages.
The advantage of the expenditure-based approach is that it is fairly straightforward to carry out if
survey data on the population are available. The disadvantage is that it can be difficult to put into
practice when the target population is generally poor (such as in a refugee situation prior to
assistance), so that the number of households who have sufficient expenditures to be just above the
poverty line is very small. Also, it does not facilitate sector-specific interventions, which are often
desired in humanitarian contexts. Finally, it does not have a rights-based perspective. For example,
the food patterns for those “just able to meet their essential needs” are typically just taken as they
are with no nutritional requirements reflected in the reference basket.16
The advantage of the rights-based approach is that it can be carried out without survey data at the
construction stage (survey data is needed however to monitor the MEB). The disadvantage of the
rights-based approach is that even if it is based on assessed needs, the effective demand of
households can look quite different from the “needs” that results from this approach.
16
A study conducted in Nepal showed that the food poverty line is well below the so-called ‘nutrient poverty’
line, see Perrine Geniez, Astrid Mathiassen, Saskia de Pee, Nils Grede, and Donald Rose (2014). Integrating
food poverty and minimum cost diet methods into a single framework: A case study using a Nepalese
household expenditure survey.
14MINIMUM EXPENDITURE BASKETS
In the original MEB constructed for the Syrian refugee operation in Turkey, the share devoted to
education expenditure was 17 percent while the average education expenditure share in the pre-
assistance expenditure data is under 2 percent (this does not vary much with household
vulnerability status). The large expenditure share in the MEB reflects the costs for transportation
to schools in rural areas where no buses are available and where the only way for households to
send children to school is to hire private transport. To assure children’s right to education, the
transport costs are counted for in the MEB.
Since the MEB was constructed to assure full access to all rights, the high education expenditure is
justified. However, this can be problematic if we want to compare the theoretical costs for basic
needs as estimated by humanitarian partners with the actual consumption choices of households.
Even if households are assisted, there is nothing to say that they actually start hiring private
transport to get their children to school, i.e. the principal ‘need’ identified by humanitarian actors
will not necessary translate into effective demand if the MEB is used as a basis for transfer value
calculations. While an important access problem has been identified, other complementary
interventions will likely be needed to address it.
If there is a large difference between the constructed MEB and actual expenditure patterns, it will
be difficult to compare the two once an operation is in place, and household expenditures will need
to be monitored against the MEB.
Another disadvantage is that a rights-based MEB can easily become an instrument for different
partners to compete for and secure funding. There is a substantial incentive to include excessively
high sectorial needs if sector-specific interventions are envisaged. Finally, if the MEB is very detailed
but the expenditure module in the household surveys is very crude, comparison is difficult and
therefore the practical use of the MEB can be limited. Many households may fall below the poverty
line simply because of the discrepancy in methods between the MEB and the survey data collection
rather than for any other reason. This is very similar to the issue previously discussed regarding the
use of national poverty lines.
The non-food component in the Turkey MEB includes the items outlined in Table 1. The WFP
expenditure module asks about expenditure on non-food items in two questions: (1) hygiene items
and (2) ‘other’ (including clothing, shoes, tobacco etc.). This difference in detail between the MEB
and the expenditure data may make it difficult to evaluate the expenditure data against the MEB.
There is no straightforward solution to the problems outlined above but it is good to keep them in
mind when deciding which method to use to establish the MEB. An inflated MEB is of limited use for
operational and monitoring purposes, thus WFP should always advocate for a realistic, operational
MEB. One way to ease some of the concerns and make the MEB operationally useful is to combine the
two approaches, keeping the rights-based lens but also making sure that the MEB is consistent with
demand behaviour. Of course, this is subject to the availability of expenditure data. As stated above,
the MEB should only capture needs that households will realistically cover through the market; it
should not be an attempt to monetize all the needs of a population. If education is difficult to access
15MINIMUM EXPENDITURE BASKETS
for the target population (using the example above), adding an education component in the MEB to
facilitate education support will not necessarily solve the access problem. If electricity is not available
for the target population, the MEB cannot include electricity even if in some contexts it should be
considered an essential need. A food basket component that corresponds to an ideal basket may or
may not achieve adequate nutrition when it is operationalized because of the consumption choices of
households and food allocation within households. Other complementary nutrition interventions may
be needed instead, such as providing certain nutritious foods for specific target groups such as young
children (6-23 months), in-kind or through a commodity-specific voucher, and social behaviour change
communication to raise awareness and stimulate people to make better choices for health and
nutrition. Just because a need has not been captured by the MEB, does not mean that this need should
not be considered an essential need and supported through complementary interventions.
As shown in Table 3, the approach to take when constructing a MEB will depend on the purpose of
the MEB, the possibility of collecting data and the status of the population to be assisted. Sometimes
an expenditure-based approach is the best solution, but if a multi-stakeholder response is envisaged,
a hybrid MEB is likely to be the best solution, as long as data are available.
16MINIMUM EXPENDITURE BASKETS
Table 3. Approaches to establishing MEBs, data requirements, pros and cons, and when to use which approach
Approach Data requirements Pros and cons When to use
+ straightforward to carry out
- problematic when everybody is - when WFP is the only actor
CFSVA, EFSA, household pre-
poor - when WFP wants to monitor
Expenditure-based MEB assistance baseline data or PDM,
- might not reflect essential needs expenditure patterns in relation to
survey data from partners
from a rights-based perspective the MEB
+ survey data is not needed
- if a multi-stakeholder response
- effective demand can be different
envisaged
Detailed prices/cost for food and from assessed needs > comparison
Rights-based MEB - when “everybody is poor” and
non-food expenditures with monitoring data is hard
survey data are not available
- big incentives for partners to
inflate sector-specific needs
Detailed prices/cost for food and - if a multi-stakeholder response
+ combining the rights-based lens
non-food expenditures, CFSVA, envisaged and survey data are
with an approach consistent with
Hybrid approach EFSA, household pre-assistance available
demand patterns
baseline data or PDM, survey data - when “everybody is poor” and
- data intense
from partners survey data are available
17Other important considerations ➢ Consider price changes over time To be operationally useful, the MEB must be updated over time to account for price changes faced by the target group. If inflation is high, this might have to be done on a monthly basis, if it is low, once a year might be enough. This should be planned for when the MEB is constructed to assure that the costs of the MEB components can be updated. A simple solution is to adjust the MEB with the national/sub-national CPI or its components. However, in some crisis contexts, CPIs are not updated or relevant for the target population. Urban areas are often over-represented in the national CPI or prices and costs faced by, for example, displaced populations can be very different from the national price level. In poor contexts where food constitutes a large part of the household expenditures, the price developments of food and fuel are central when it comes to capturing price changes. Based on WFP food price data collection for basic food items (and fuel), a price index for key items can be constructed and used to estimate cost changes in the MEB. In contexts where shelter is a major part of household expenditures, development in shelter costs should also be captured. Sometimes the main purpose of the MEB is to monitor price developments in the absence of a CPI. The main purpose of the MEB in Somalia is to construct a monthly price index in the absence of an official CPI. Price monitoring for a basket of basic food and non-food items is performed. The MEB represents a set of food items comprising 2,100 kilocalories/per capita/day and non-food items such as such as water, kerosene, firewood, soap and cereal grinding costs. The MEB contains four sub-baskets; two baskets cover the rural and urban towns in the North West and the other two cover the rural and urban towns in the rest of the country. ➢ Adjust for regional or urban/rural price differences if needed If beneficiaries are concentrated in one area, there is clearly no need to adjust for regional price differences. However, if they are spread out in urban/peri-urban and rural areas throughout the country, adjusting for differences may be vital. This means that different MEBs have to be constructed for different regions or for rural or urban/peri-urban areas. There are a few approaches for this. 1. Price the baskets based on available price data in different regions or urban/rural areas. For the food basket, this is possible using the VAM price database or other similar price series. For non- food items, housing, utilities and services, this can be more challenging and may rely on price data collection by partners or require new data collection. 2. For some countries, price data provided by the national statistical office are useful. In the case of Turkey, regional purchasing power parity indices were used to provide price estimates for components of the MEB for which direct price information was not available. 3. Use approximations from expenditure data. If the household survey has sufficient regional coverage, the expenditure levels in different regions can be explored, using the cohort of households just above the poverty line. Care should be taken in using this method, particularly if the sample size is very small by region.
➢ Account for differences in household composition and economies of scale in household
consumption
In the context of food assistance, households are most often given assistance according to their size
on a per capita basis (even though different household members have different needs). When
establishing a MEB, this is problematic. The needs of a household grow with each additional member
but, due to economies of scale in consumption, not in a proportional way. Some goods consumed
within a household, such as food, are “private“ in character - once a person has consumed it, no one
else can consume the same - while there are other goods that are “public”, as they can be consumed
commonly among household members. Hence, needs for housing space, electricity, etc., will not be
three times as high for a household with three members than for a single person. The aggregation of
many needs will compound the problem if they are treated per capita and are particularly problematic
in contexts where food needs do not constitute a major part of the household essential needs. Using
a per capita based MEB to facilitate targeting or transfer value calculations is not recommended as big
households will always be found to be vulnerable by construction as the per capita approach assumes
that the household expenditures increase proportionally for each added household member. In many
contexts, this is implicitly dealt with by calculating a MEB for only the most common household size.
However, if the MEB is to be used for operational purposes, this is not very practical.
Figure 2 shows expenditures by household size compared to one-person households based on the
Vulnerability Assessment of Syrian Refugees in Lebanon (VaSyr) 2017. Only when the household
size reaches five does the average expenditure double compared to a one-person household and it
takes eleven members to triple the expenditures of a one-person household.
Figure 2: Increase in household expenditure by household size compared to one-person households
3.5
3.0
Multiplication factor
Double
2.5
Triple
2.0
1.5
1.0
1 2 3 4 5 6 7 8 9 10 11
Household size
Total Food Non-food
Outside the humanitarian world, the most common solution to this problem is to use equivalence
scales. Mostly, these do not only take into account economies of scale, but also different needs of
children and adults. A typical equivalence scale measures the number of adults (sometimes adult
19males) deemed to constitute a household. For example, a child under 15 is counted as a fraction of an
adult (e.g. 0.5). The effective household size is then the sum of these adult-equivalent fractions.17
However, not only the household size needs to be translated into adult equivalents but also the
quantified needs, i.e. the MEB (see ANNEX 2 for an example using data from Lebanon). While not very
complicated as such, using equivalence scales might prove challenging since the same approach has
to be used in both assessments and monitoring and ideally also be translated into operational decision
making. The alternative approach, recommended here, is relying on the fact that while WFP often (but
not always) gives assistance on per capita basis, many partners give assistance per household,
regardless of household size. Thus, a pragmatic solution is to calculate the food component in the MEB
on per capita basis and the rest of the needs as a flat rate regardless of household size. This approach
was taken for the calculation of the multi-purpose cash assistance in Lebanon (although the MEB itself
is still for a five-person household). This will in practice balance the fact that household needs do
increase as members are added but not in a proportional way. A variation of this approach is to
calculate the food component on per capita basis and a household-size specific non-food component
as described in ANNEX 1 for the MEB in Kinshasa. The disadvantage of this pragmatic approach is that
the MEB will vary by household size, but given its simplicity, this is still the most preferred approach.
➢ Consider seasonal variations if significant
In many countries where WFP works, seasonal price variations are substantial. This calls for
considering the construction of different MEBs for the harvest and the lean season. In other contexts,
household needs change with the seasons. In Turkey where winters are cold, households have
additional needs for heating and warm clothes to survive. If a survey is undertaken when prices are
high or winters are cold without adjusting the MEB, it is likely that there is a decrease in the percentage
of people below the MEB as households have higher needs or are confronted with higher prices and
thus have higher expenditures. In Turkey, it was estimated that household needs during the winter
would result in a 48 percent increase in minimum expenditures.
➢ Validate with stakeholders and make reality checks
In most context the construction of the MEB take place in an interagency context, implicitly resulting
in a validation process. However, not all clusters might be engaged in the Cash Working Group,
resulting in limited by-in and understanding of the MEB unless they are specifically consulted.
Government stakeholders and development partners are another essential group unless they already
have been involved in the process. Endorsement by government counterparts will be needed because
of existing government safety nets or policies regarding minimum wages. If, for example, the targeted
populations are refugees or IDPs and the transfer value that is established based on the MEB is higher
than social assistance provided by the government to its own population, there is a high risk of
tensions with the government. Development partners might on their side wonder why a MEB is
needed in addition to the national poverty line. Dialoguing with partners such as the World Bank is
therefore essential. In addition to government and partner validation, general reality checks are
17
One common equivalence scale is the OECD scale: it assigns the weight 1 to the household head, 0.7 to all additional
adults, and 0.5 to all children. A household with five people, say, two adults and three children, consists of 3.2 adult
equivalents (1+0.7+0.5+0.5+0.5). This is a common scale used in many developing and developed countries. Another
common scale is to give weight 1 to each adult and different weights to children depending on their age. For the official
poverty line in Zambia, the following weights are given to children: 0-3 years: 0.36, 4-6 years: 0.62, 7-9 years: 0.76, and 10-
12 years: 0.78.
20essential. How does the constructed MEB compare with teacher salaries or typical daily labour rates?
For the MEB to be of practical use in operational contexts these checks are essential.
How to construct a survival minimum expenditure basket (SMEB)
In addition to the MEB, a SMEB is often constructed. A SMEB can serve at least two purposes. First,
together with the MEB, it can be used to classify households into different vulnerability categories.
Households under the SMEB are classified as severely vulnerable, households between the SMEB and
the MEB as moderately vulnerable, and households above the MEB as not vulnerable. This information
can then be used for prioritization of beneficiaries or for monitoring purposes. Second, in some cases
where the MEB has been considered as “too high” to facilitate transfer value calculations, compared
to national social assistance, the SMEB has instead been used.
The principal difference between a MEB and the SMEB is that while the MEB implies full access to
rights as defined by humanitarian law, the SMEB is just the minimum amount required to maintain
existence and cover lifesaving needs. In the context of national poverty lines, a distinction between a
full and a food poverty line is often made. In the humanitarian context, the distinction between the
MEB and the SMEB has been very different in different contexts, to the point that they might not be
useful to use as a reference. The experiences so far within WFP mostly come from the Syrian refugee
context. ANNEX 1 illustrates how a MEB and a SMEB in Kinshasa were constructed.
In Jordan, the SMEB includes food, shelter, water and sanitation.
In Lebanon, only health and education are excluded from the SMEB while other needs are covered
with smaller amounts in the SMEB compared to the MEB. For example, the SMEB has a less diverse
food basket than the MEB, corresponding to the WFP food basket. Debt repayments are also covered
in the SMEB.
In Turkey, a similar approach to that in Lebanon was taken. The SMEB in Turkey relies more heavily
on actual expenditure patterns than the MEB.
The recommendations here are the following:
1. Before constructing a SMEB in an interagency context, the population of interest should be
consulted. According to them, what do households need at the very minimum to maintain
existence and cover lifesaving needs?
2. If there is no interagency SMEB or there is agreement among partners, the MEB/SMEB distinction
can follow that of many national poverty lines, i.e. the SMEB corresponds to the minimum food
expenditure basket.
How to find a proxy for a MEB when data or time is insufficient
A full MEB can be challenging to construct in a sudden onset emergency or if data are scarce or
unavailable. Here are some thoughts on how this could be resolved. However, from a ‘do no harm’
perspective, it is important to underline that proxies should only be used on interim when no other
solutions are available.
1. Use the national MEB.
212. A MEB is a good preparedness measure and should be constructed before an emergency. While
both prices and availability will be affected by an emergency, it is still likely to provide a useful
starting point.
3. The expenditure-based MEB essentially only requires (a) an approximate value of the food basket,
and (b) an estimate of the average expenditure share that households use on food. Even if no
survey data are available, this information should be available to the Country Office or can rapidly
be collected or approximated.
4. Consider using the minimum wage as a proxy. Bear in mind that while the MEB captures
household-level needs, the minimum wage is individual-level income so an assessment of how
many minimum wages are needed per household depending on the household size is required. It
is also advisable to find out how the minimum wage has been constructed. The advantage with
this approach is that it is aligned with government approaches.
Questions or comments?
We are keen to learn more from you. Please contact the VAM or CBT Programme teams in HQ for
any questions or comments.
22ANNEX 1
The Minimum Expenditure Basket in Kinshasa
The MEB in Kinshasa was constructed by WFP as a part of an urban assessment focussing on household
essential needs. A hybrid approach (mix of an expenditure-based and a rights-based approach) was
applied to construct the MEB. Annex Table 1 shows how the MEB components were determined and
how the expenditure components included in the MEB/SMEB were analysed. These are further
discussed below.
Annex Table 1: MEB and SMEB components and how they were derived
MEB Subcomponents Method Calculation Household Inclusion in
component size MEB and SMEB
adjustment
Food • Maize meal Expenditure- Mean Per capita MEB: Inclusion
• Cassava based approach expenditure for adjustment of all food
• Beans for each the cohort of items that are
• Vegetable oil subcomponent, households with being
• Fish scaling to 2100 Food consumed and
• Sugar kcal per person Consumption calorie-scaling
• Vegetables per day Score < 70 and on all calorie-
• Fruits reduced coping relevant items
• Dairy strategy index <
SMEB:
15
• Condiments Inclusion of
cereals, tubers,
beans, oil,
scaled to 2100
kcal.
Rent 2-room housing Rights-based, Typical monthly 1 room for No
using qualitative rent of a 2-room 1-2 person
information apartment HH, 3 rooms
for 8+ HH
Education • School fees Rights-based Median school None No
• School meals (exp.-based fees and material
and material determination cost per month
of amounts) per child
Health • GP’s visit Rights-based, Median cost of Per capita No
• Over-the- using qualitative one doctor’s visit
counter information per person per
medication year
Monthly amount
for OTC
medication
Other non- • Water Expenditure- Median Adjustment SMEB includes
food Items • Cooking fuel based expenditure of using an only water,
• Lighting (subcomponent median expenditure- cooking fuel,
• Hygiene s included in household size based lighting,
products line with what with Food household- hygiene
• Electricity typically is Consumption size products
defined to be Score < 70 and
23• Transport part of essential reduced coping adjustment
• Clothes needs) strategy index < scale
• Communicati 15
on
For the expenditure-based components of the MEB, the aim was to analyse households that can
generally be considered above the poverty line, while at the same time not being too wealthy. For this
MEB we chose a theoretically justifiable, yet somewhat arbitrary upper and lower thresholds of
household exclusion. On one hand, we are excluding households with a Food Consumption Score over
70 (a mid-range value between the threshold for adequate diet and the maximum value), thereby
filtering out the households that are consuming an unusually rich and expensive diet with daily intake
of several protein-rich food items. On the other hand, we are excluding households with a food-based
coping strategy index above 15, so as to ensure that households with highly negative coping behaviour
are not included as reference households for the MEB threshold.
For the adjustments to smaller and larger households, we are advocating for a per-capita adjustment
for the food basket and a specific household size adjustment scale for the expenditure-based non-
food items. For the rights-based parts, we will argue for specific adjustments.
Food Basket
We distinguish between a standard food basket that reflects actual consumption patterns as observed
in the selected cohort of households (MEB), and a survival basket ensuring macronutrient sufficiency
(SMEB).
Annex Table 2: Calculation of the food basket for Kinshasa
MONTHLY URBAN FOOD BASKET
average
kg
food-
food-
Food item caloric value
Survival basket elements
Kg consumed/month
Kcal consumed/ day
consumed / month
Kg/month rescaled
basket
Kcal/day rescaled
SMEB
MEB
capita
spending
Rounded
Rounded
Kg price
Survival
basket
basket
/100g
Per
Food Item
Maize 6898 900 7.7 360 920 982 8.2 7400 982 8.7 8000
Cassava 1808 500 3.6 342 412 440 3.9 1900 440 4.1 2100
Beans 2089 1300 1.6 335 179 192 1.7 2200 192 1.8 2400
Veg Oil 2341 2300 1.0 890 302 322 1.1 2500 322 1.2 2700
Fish 4306 2500 1.7 76 44 47 1.8 4600
Sugar 1817 2200 0.8 400 110 118 0.9 1900
Vegetables
2826 2800
Fruits 833 800
Dairy 799 800
Condiment
2509 2500
Meals Outside
House 2144
Total 28371 Total kcal 1967 2100 27400 1936 2100 15200
24The MEB and the SMEB food basket calculation are described in Annex Table 2. The process of deriving
the final amounts for each food item is as follows:
Annex Figure 1: MEB and the SMEB food baskets for Kinshasa
(Congolese Franc)
1. For each of the food expenditure categories,
30,000
27,400 we decide whether they have a significant
caloric relevance in the overall food intake of a
2,500
25,000 person. In the case of Kinshasa, we decided that
cereals, tubers, pulses, oil, animal protein and
2,800
sugar contribute significantly to people’s calorie
20,000 1,900
intake.
15,200 4,600 2. For each of the calorie-relevant food groups,
15,000 we select the most commonly consumed food
2,700
2,500 item of this group in the local context. For
2,400
10,000 2,200 Kinshasa, maize meal is used as the cereal,
2,100
1,900 cassava flour for tubers, red beans for pulses,
vegetable oil for the oil component, and white
5,000
8,000 7,400 sugar. As part of our market visits, retail prices
for these food items were collected.
- 3. Knowing the average per capita expenditure
Maize Manioc from the household survey and the market price
on each component, we can approximate the
Beans Veg Oil
quantities consumed per person per month.
Fish Sugar
Next, we can calculate the daily caloric value
Vegetables Fruits associated with these quantities and derive the
Dairy Condiment total kcal value of this average basket. In the
case of the urban zone of Kinshasa, this
amounts to 1967 kcal, which is good indication that the expenditure data is likely to be fairly
accurate.
4. Nevertheless, we perform an adjustment of this basket by scaling the caloric values
proportionally to ensure the sum of all food items reaches the standard daily average caloric
requirement of 2100 kcal.18 On the basis of this caloric value, we then convert all values back
to monthly data to derive a monetary value for each food item.
5. In addition to the calorie-relevant food items, we add the mean expenditure on other food
categories that households regularly consume. As these food items have little overall caloric
share on people’s diets (given the quantities consumed or the type of the foods), we do not
include them when we rescale the calories. However, we can assume that most households
would still consume these food items as part of their usual diets. In addition, even if these
food items have little significance for overall calorie intake, they are very important as part of
18
In the guidance, it is argued that WFP data cannot be used for establishing whether households consume enough
calories or not, yet here the data is used to establish an average approximate food basket of 2100 Kcal. The difference here
is that the data is only used to construct an average basket which is different from judging the sufficiency on individual
household level.
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