In all analysis concerning the poverty decomposition, we modified the poverty line in order to get the same poverty level in 2012/13 using the modified consumption aggregate. The modified poverty line is 3,480 Rs in 2012/13 prices.

For international comparison, the World Bank sets the poverty line to 1.25$, 2.50$ or 4.00$ (2005 Purchasing Power Parity terms) per day. In all figures where we show international comparisons, we used the international poverty lines expressed in Rupees by applying the ppp conversion factor for private consumption.13 Table A1.3 shows the conversion from Rupees to International 2005$ ppp.

**Table A1.3: National and International Poverty Lines, Rupees 2012/13 prices and International** **<u>$2005ppp</u>**

||Rupees<br>2012/13 Prices|International $ 2005ppp|
|---|---|---|
|National PovertyLine|3,624.44|1.50|
||3,028.88|1.25|
|International Poverty Line|6,057.75|2.50|
||9,692.40|4.00|

Source: DCS and our elaboration for the National Poverty Line, our elaboration on _povcalnet_ for the ppp conversion factor, which is 40.039 in 2005.

# **Employment data**

Sri Lanka HIES uses the concept of usual status/usual activity to capture employment information without any particular reference period. As it was based on responses of the respondent and not further probed, it is observed some of the household members receiving labour income are recorded as not employed. This may be due to part time employees and since employment status in HIES depends on perception.

Since our analysis depends on consumption, employment and income, the employment status was edited and alternative concept is used. A person is treated as employed if reported as employed in demographic section or income from employment is greater than zero in the income section. Employment status was not exactly comparable in 2009/10 and 2012/13 surveys with 2002 survey as unpaid family workers were not separately identified in HIES 2002. Hence unpaid family workers are identify for HIES 2002 by considering employment and income data. A person is treated as unpaid worker in 2002 if the person is reported as employed in the demographic section and there is no income for that person in the income section.

Main industry of the employed person such as agriculture, manufacturing and service sectors are also not exactly comparable in 2002 and 2009/10 or 2012/13 surveys. In HIES 2002, industry of the wage income was separately recorded along with wage income and income from self-employed were separately captured by major industries such Agriculture, Mining & Quarrying, Manufacturing, Construction, Trade, Transport, Hotels and restaurants and Other services. In HIES 2009/10 and 2012/13, on the other hand, main industry of the occupation was recorded in the demographic section and industry of the wage income was not separately recorded. Industry for self-employment categories was collected as in HIES 2002.

Considering the above limitation for identifying industry when more than one employment source was recorded for an individual, the major income generating industry is considered as main industry of the employed individual.

> 13 The ppp conversion factor gives the amount of local currency in current prices which buys the same amount of goods that 1$ would have bought in 2005.

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