Guidance release: Using the HEA for measuring actual incomes and the income gaps
The Living Income Community of Practice recently published guidance on the use of the Household Economy Approach (HEA) to support understanding around farmer circumstances and income improvement. One of the priorities for the Living Income Community of Practice in 2020 is to bring more clarity around approaches to measuring actual farm incomes so that the can be compared and analysed against Living Income benchmarks. The HEA guidance is part of a three part series that will also explore standardised approaches to reporting the income gap, the data required to achieve this, and what can be done when the data isn’t available.
The HEA is both a research methodology and analytical tool originally developed to improve humanitarian assistance and food security programming. It can serve a number of purposes associated with understanding the economic situations of target communities, but this guidance ‘Applying the HEA to Measure and Address Income Gaps in Agriculture Supply Chains’ focuses on how it can be leveraged to calculate income gaps and help in designing and targeting supply chain interventions. In brief the HEA acts as a relatively flexible framework which can be used to fit a variety of purposes, depending on the user’s needs.
The guidance specifically explains how the HEA can be used to measure and analyse incomes, measure household economies against thresholds/benchmarks (including Living Income), and identify actions to improve income using scenario modelling. As the HEA has previously been employed by a large variety of global actors (including the World Bank, UNDP, UNHCR, and FAO), the document also deliberates some of the advantages, opportunities and costs of using existing and new HEA data for future work around Living Income.
The guidance was developed by Jessica Grillo (Heartwood LLC) and Jennifer Bush (Food Economy Group). Save the Children and the Living Income Community of Practice’s Technical Advisory Committee were also consulted on its development.