This paper draws on the Vanuatu 2010 Household Income and Expenditure Survey, to construct the Food and Basic Needs Poverty Lines, compute the incidences of Food and Basic Needs Poverty, and provide a detailed analysis of poverty in Vanuatu.

The analysis includes the incidence, severity and depth of poverty, the characteristics of the poor, changes in poverty between 2006 and 2010, and the economic factors that contribute to those changes. The paper classifies households and individuals as poor if they are below the Basic Needs Poverty Line (BNPL) (defined below), vulnerable to becoming poor if their expenditure is no more than double the BNPL and non-poor if their expenditure level is more than double the BNPL.

The paper analyses inequality in the distribution of expenditure and calculates Gini coefficients from expenditure data. The analysis includes calculations of the value of subsistence production consumed by households. The analysis identifies three sub-national areas: the two urban areas of significance, Port Vila and Luganville, with all other areas classified as Rural. They respectively contain 20%, 6% and 74% of the population.