In the next section, we explain our methodology to examine the issues described above based on a case study of Ghana.

# **3. Methodology**

## **3.1. Ghana context and price data**

### _Ghana context_

The official poverty level in Ghana is measured based on the nationally representative household budget survey (Ghana Living Standard Survey [GLSS]). GLSS7 covered 14,009 households in 1,000 EAs and was conducted over a 12-month period between October 2016 and September 2017 (GSS 2018).<sup>17</sup> The sampling was designed so that the survey gives information representative of urban and rural areas and across the 10 regions. Household-level consumption aggregates include both food (including auto-consumption) and non-food (including imputed housing rents) consumption. Further, consumption aggregates are converted to per adult equivalent annual consumption for poverty measurement to reflect differences in household size and composition and differences in calorie requirements of household members.

Consumption aggregates are deflated both temporally and spatially. The temporal deflation adjusts the differences in the timing of data collection between October 2016 and September 2017. Monthly regional CPI indexes are used for the within-survey-months temporal deflation. The spatial deflation on the other hand adjusts for the differences in the cost of living across the 10 regions based on the official regional CPI values. The reference region of the spatial deflation is Greater Accra (January 2017).

Ghana measures poverty based on the single poverty line approach, that is, there is only one poverty line (GSS 2018). Spatial cost of living differentials are adjusted at the consumption side (as opposed to the multiple poverty line approach where poverty lines account for spatial price differences). The poverty line value is GH₵1,760.8 per adult equivalent per year, which was deflated by using a mixed deflator based on CPI raw price data and survey weights from the original poverty line of January 2013 (GH₵1,314). The official poverty headcount ratio in Ghana in 2016/17 is 23.4 percent, where urban and rural poverty is 7.8 percent and 39.5 percent, respectively (GSS 2018). Gini coefficients are 41.6 at the national level, 36.5 in urban areas, and 40.5 in rural areas.

### _Price data_

For this study, the main price data sets we use are the market price survey data from GLSS7 and CPI price data.<sup>18</sup> The market price survey was collected from 398 clusters (or EAs in the GLSS7 data collection), of which 209 clusters are located in urban areas and 189 clusters are located in rural areas (Table 3). Those clusters cover 174 districts in all the 10 regions of the country. Out of 109 food items found in the GLSS7 consumption module, the market price survey has price information for 96 of them. The CPI price data are regularly collected from 44 markets, covering all the 10 regions of the

> 17 The previous rounds of GLSS surveys were conducted in 1987/88, 1988/89, 1991/92, 1998/99, 2005/06, and 2012/13.

> 18 Survey unit values cannot be calculated based on the GLSS7 consumption module due to the prevalence of nonstandard units and lack of conversion factors.

13