for those with expenditures above 60 percent of the PL; this confirms that the poorest of the poor did not benefit from growth during the period. Many of those in this category are likely located in Central Mozambique (see Figure , bottom left graph) where for most households consumption reverted to its 1996/1997 levels. Finally, the positive performance of the South is less pronounced than in the previous period, but the poverty rate nevertheless fell to about 30 percent, and clear improvements can be observed across the distribution.

# **Conclusions**

Over the past decade there has been intense debate in Mozambique surrounding not only poverty rates and trends, but also data quality and analytical rigor. The aim of our analysis is to advance the discourse on poverty measurement by providing alternative methods to compute poverty rates. Our findings indicate that two interrelated factors have created significant weaknesses in the official reporting of poverty statistics, with the greatest degree of inaccuracy occurring between 2002/03 and 2008/09. We are presented with compelling evidence of the widespread underreporting of consumption expenditures in the survey data, and our assessment reveals serious methodological issues regarding the formulation and use of location-specific poverty lines based on those data. To address these issues we have proposed specific methods to reduce the occurrence and minimize the impact of underreporting and to construct less specific, yet more accurate, PLs based on a single national consumption basket. The national basket is developed using data from the first (and apparently most comprehensive) available survey (1996/97) combined with updated price data from each subsequent survey round. The revised figures produced by our methodology differ substantially from the official poverty lines, which are based on province-specific and time-flexible bundles with entropy correction (MPD-DNEAP, 2010; MPF/IFPRI/PU, 2004).

By examining the location-specific PLs we determined the likely cause of the excessively high regional differentials: observations affected by consumption underreporting, which are characterized by an unusually large share of non-food consumption, tend to skew local PLs upward in those areas where underreporting is most common (i.e. urban areas in general, and the South of the country in particular). As an alternative to the evidently inaccurate official PLs we constructed a single national PL and two addition PLs reflecting urban and rural divisions at the national level. Not only are these measures more consistent with standard poverty correlates, both at the regional and household levels, but the overall national and nationwide urban/rural PLs seem to be less affected by measurement error, as they rely on a larger sample in calculating their consumption baskets.

The results of our revised methodology demonstrate that the substitution of province-specific PLs with a national PL based on a 1996/97 consumption basket and combined with a partial re-estimation of observations (about 1/4 in the two years) produces poverty estimates for 2002/03 and 2008/09 that are significantly more consistent with other socioeconomic indicators and considerably more stable over time than the official statistics. In our revised estimates, poverty is substantially lower in Southern Mozambique and in urban areas overall than the official figures would indicate, and dramatically higher 25