Equation 6 produces a national, fixed-basket, spatially-deflated poverty line for each of the three survey periods. The results are presented in Table 4 (see Appendix), along with the official figures.

# **4.2 Comparison between official and revised PLs**

A comparison of the official and revised PLs confirms a number of hypotheses discussed in previous sections. The revised PLs are more stable over time, reducing the frequent reshuffling of regional poverty rankings in the official data. The coefficient of variation (CV)<sup>31</sup> calculated for the revised PLs ranges from 0.19 in 1996/97 to 0.20 in 2002/03 to 0.14 in 2008/09, whereas the CVs for the official PLs are 0.29, 0.46, and 0.28, respectively. When looking at the ratio of the highest PL (Maputo City in all cases) over the lowest PL, the results are more stable for the revised figures (around 1.6). Conversely, the ratios for the official PLs are 2.54 for 1996/97, a remarkable 3.57 for 2002/03, and 2.31 for 2008/09.

In addition, a fixed national basket produces a substantial reduction in the PLs for Southern Mozambique and urban areas, both in 2002/03 and in 2008/09, the survey periods in which we identified the greatest impact of measurement error. In the 1996/97 survey, which is less affected by measurement error, the gap is smaller. Interestingly, the gap between the revised and official PLs widens between 1996/97 and 2002/03 and then either stabilizes at the 2002/03 level or slightly decreases in 2008/09. This appears to provide additional evidence of the fundamental problem in the more recent surveys: the gap widens when the error is introduced (2002/03) and stabilizes thereafter, as the error distribution does not change much between 2002/03 and 2008/09 (see Table 1).

One possible objection to these findings is that differences between 1996/97 and the two later surveys are not necessarily related to measurement error and might be interpreted as merely a consequence of fixing the basket in 1996/97, with the gap between the revised and official PLs widening because of changes in the baskets themselves, i.e. substitution.<sup>32</sup> However, this argument is not entirely convincing: when constructing national-basket PLs with baskets that change every year (see Section 3.2 and Appendix) the resulting values are still closer to our revised PLs, suggesting that the inter-temporal effect of basket substitution is minimal. The gap is therefore either capturing some spatial basketsubstitution effect or, as we argue, is a product of the interaction between location-specific PLs and systematic measurement errors in the data.

Finally, the comparison reveals another interesting phenomenon: the growth rate of the poverty lines. This provides, for each of the 13 regions, a measure of the change in the cost of living exactly at the poverty line. By design, this particular measure of inflation is most relevant for the poor, as the contents of the food bundle reflect items that are consumed by the poor and regarded as necessary for basic survival. Although the PLs themselves appear to be significantly impacted by measurement error, their rate of change over time is consistent with the available price data. While the rates of PL growth

> 31 , where = the standard deviation and = the mean. Lower CV values mean less variability.

> 32 Revised PLs are constructed by fixing the basket at national level in 1997, therefore the whole inter-temporal variation is explained by price changes only.

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