Only five governorates belong to the second group: Mosul, Kirkuk, Anbar, Baghdad and Salahaddin. Beginning from June 2014, there is significant or complete non‐response in Salahaddin, Kirkuk, Nineveh and Anbar. In the case of Baghdad, only 65 percent of the intended respondents completed the survey with the last quarter of the survey’s year and the rural sample being severely affected. Additionally, the number of households interviewed varies within the same governorate per month in all governorates. Furthermore, the sample frame used by C‐IHSES did not include households who were forcibly displaced across governorate boundaries during the second half of 2o14.

Despite all these limitations, a few exercises are proposed as second best options to assess the micro‐ simulation results. In order to test the Business as Usual scenario, the comparison between the first half of IHSES 2012 and C‐IHSES 2014 for the whole country seems a reasonable approximation of what would have happened if there were no crises. However, some additional constraints and challenges arise in both micro and macro inputs dimensions. From the micro standpoint, rural Baghdad was excluded from the analysis to address comparability issues between these surveys, sample weights were adjusted and poverty lines were re‐estimated based on IHSES‐2012.<sup>25</sup> From the macro perspective, macroeconomic inputs may vary differently between actual first‐half growth rates and simulated year growth rates.

# _Aggregate results in BaU scenario_

Table 10 reveals that micro‐simulation results for changes in poverty were more conservative than what might have actually happened if there were no crises for the country as a whole. For instance, while the micro‐simulation model predicted a reduction of almost 4 percentage points in the headcount between 2012 and 2014; the actual reduction in the incidence of poverty between the first half of 2012 and 2014 was about 2 percentage points higher. Inequality micro‐simulation predictions were more aligned to what Iraq experienced between 2007 and 2012 rather than what has happened in the first half of 2012 and 2014. In other words, actual movements in inequality indicators such as Gini and Theil were in the opposite direction as predicted.

The simulation model preformed much better when the incidence of poverty was predicted at the regional level. Two‐thirds of the regional poverty headcount levels were not significantly different from actual levels in 2014 (i.e. Kurdistan, South, Rest of North and Centre) (Figure 9). Baghdad and IS‐affected governorates’ headcounts were overestimated by the micro‐simulation method in the BaU scenario. The simulation also overestimated the poverty gap in most regions except for Rest of North and Centre whose point estimates are within the confidence interval of indices for the first half of 2014 (Figure 10).

# _Measuring the impact of the twin crises in host governorates_

As mentioned above, the household survey was implemented only in 13 out of 18 governorates throughout the year. This allows us to measure the impact of the twin crisis by implementing a before and after approach on these geographical areas. This method measures the difference on welfare or any other outcome like poverty or inequality between the first and second half of 2014. However, it is possible

> 25 Further details on the methodology used see Krishnan, Olivieri and Germiniasi (2015)

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