Monday, January 28, 2019

Emerging consumption pattern and distribution in Nepal

Central Bureau of Statistics recently released annual household survey 2016/17, which is fifth in a series of quick surveys that looks at the state of consumption, demography and social services. It used to include employment module too, but is missing from the last two surveys (NLSS IV or NLFS III will cover them). Here is a blog post from 2014 on AHS I.

AHS V shows that consumption pattern has not changed much in the last five years (and since NLSS III). The total nominal household consumption was NRs1,555.4 billion in 2016/17, a 5.3% increase over 2015/16, when consumption decreased by 8.9% (a result of border blockade, which severely dented non-food consumption). Food consumption accounted for about 56.6% of total household consumption. Average household consumption is recovering after the decline caused by the devastating earthquakes in 2014/15 and border blockade in 2015/16. 
What about the composition of household consumption? As noted above, about 50% of household consumption expenditure goes to food. This is followed by rent 12.7%, durables, 7.1%, education, 4.1%, alcohol and tobacco 3.7% and utilities 2.4%. 18.1% of household consumption expenditure goes to other non-food items. Notice that as a share of consumption expenditure, households on average spend more on alcohol and tobacco than utilities and it very close to expenditure on education. 
The poorest household consumption quintile (i.e., poorest 20% of the households based on consumption expenditure) actually spent more on alcohol and tobacco (3.9%) than education (2.3%) and durables (1.9%). Their food consumption accounts for 64.9% of total household consumption, which on average was NRs155,183 in 2016/17. Similar is the case with the second, third and fourth household consumption quintiles. The share of expenditure on alcohol and tobacco of the first three consumption quintiles is actually higher than the national average. The richest household quintile’s consumption on food account for 34.6% of their expenditure, followed by rent and other non-food (19.5% each) and durables (15.7%). 
Of the total household expenditure of NRs1,555.4 billion in 2016/17, the lowest 20% of households based on consumption expenditure accounted for 8.2%, and the highest 20% households accounted for 41.1%. 

Now, let us look at nominal per capita consumption based on the consumption quintiles. The overall nominal per capita consumption stood at NRs80,807 in 2016/17. Again, per capita consumption growth nosedived in 2014/15 and is far from the pre-earthquake and blockade consumption growth rate. The poorest 20% of the population has seen its share of total per capita consumption decline (7.6% in 2012/13 to 6.5% in 2016/17). Meanwhile, the richest 20% have seen their share of per capita consumption increase from 45.9% to 50.9% over the same period. So, per capita consumption based inequality seems to be increasing.
Per capita consumption on food items accounts for 56.6% of consumption expenditure (including alcohol and tobacco). Of the total per capita consumption on food items, the largest share is accounted for by grains and cereals (27.9%), followed by meat and fish (16,1%), vegetables (12.4%), alcoholic beverage and tobacco & related products (11.8%), and eggs and milk products (9.4%) among others. 
Meanwhile, per capita consumption on nonfood items accounts for 43.4% of consumption expenditure. OF the total per capital consumption on nonfood items, the largest share is accounted for by education (15.4%), followed by medical (10.8%), cultural (8.9%), jewelry and watches (3.2%) among others. 
The per capita consumption of alcoholic beverages, and tobacco & related products was NRs4,142 in 2016/17. For educational purposes, it was NRs4134. For medical purposes, it was NRs2,888.
About 15% of the population had inadequate food consumption in 2016/17. The share of households with poor dietary diversity (four or fewer food groups consumed) has decreased from 10.5% immediately after the earthquake (2014/15) to 5.3% in 2016/17. The broad food groups are: Cereals, tubers & roots; pulses; vegetables; meat, fish & eggs; fruits; milk & dairy products; ghee, oil & butter; sugar, honey & sweets. The richer the households, the better their food consumption and dietary diversity. 

Other interesting stats: 
  • About 60.5% of the population is of 15-59 years of age (working age population).
  • Dependency ratio is declining. It was 65 in 2016/17
  • Female heads a quarter of the households 
  • There are 94 male per 100 females
  • Average household size is 4.5
  • 88.4% of households have access to mobile phone and 44.8% have access to cable TV. 12.7% have access to email/internet. 
  • 85.2% of households use electricity for lighting and 9.6% use solar. 52.4% of households use firewood as a major source for cooking. 
  • About 33.1% of households use cylinder gas for cooking (among them, 54.1% of urban households use cylinder gas for cooking; for rural households, its 16.5%)