adjusts the quantities in the reference food basket to make it more relevant to what the poor are more likely to consume. First, they exclude some items that are not of relevance to the poor. Second, they exclude items for which calorie contents or unit prices are harder to obtain. Third, they remove items that contribute very little to the overall food basket; all items with less than 0.1 percent share in the total weight (in kilograms) of the basket are excluded. These adjustments result in a final basket of 42 food items, that account for 88 percent of the original basket weight composition and provide 1,206 kcal per adult equivalent per day (see NISR 2015 for a detailed justification of the adopted approach).

In the third step, the average caloric intake (and in turn item-quantities represented by the semi-normative ‘reference’ basket) is scaled up to the minimum caloric threshold of 2,500 Kcal per adult equivalent per day. This is done by multiplying the quantities in the basket with a factor of 2.07 (2500/1206). Note that if the ‘reference’ basket was directly derived from the reference group, the scale factor would have been 1.87 (2500/1335).

In the fourth step, all retained food items are grouped into 10 meta food categories, namely, cereals and products, eggs, fish, fruits and products, meat, milk and cheese, pulses, roots and tubers, tree nuts/oil crops, and vegetables. In the last step, to arrive at the ‘minimum’ cost of obtaining the ‘defined’ basket, higher cost per calorie items are replaced by lower cost per calorie items in their respective meta food category. The final basket mainly consists of roots, tubers and products (basically sweet potatoes, cassava and its products); these together make up 52 percent of the food basket. In addition, beans are included as the main source of proteins, with certain weight given to fish and meats (NISR 2015).

To arrive at the final food component of the poverty line, the basket is then costed using survey reported January 2014 prices. This gives a food poverty line (FPL) of RWF 105,064 per adult equivalent per year (around RWF 288 per adult equivalent per day) in January 2014 prices.

# **_The non-food component_**

The next step is to account for non-food basic needs. In theory, the provision for non-food needs is guided by the expenditure patterns of households for which the average food expenditure is equal to the food poverty line. In practice, the non-food component of the poverty line is indirectly estimated by taking the food budget share, s�, of households whose food expenditure is ‘close’ to the food poverty line and scaling up the FPL by this food budget share (Ravallion and Bidani 1994).

For the 2014 poverty line, s� was estimated using the median food expenditure of all households whose food consumption was within 10 percent (plus or minus) of the food poverty line. This provided a food share of 0.66, and a total poverty line of RWF 159,375 per person per year in January 2014 prices.<sup>5</sup>

> 5 Note that the allowance for non-food goods is completely consistent with demand behavior and is focused at (or in a region around) the food poverty line. No normative assumptions are made in terms of what is required for satisfying basic non-food needs. This is different from the food component of the poverty line in two ways, which (i) uses a more normative approach in defining the final food basket; and (ii) includes the consumption patterns of the poorest households in picking up the initial reference basket.

7