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This study reveals the power and utility of participatory methods for policy research. It demonstrates practices and processes that can tap the knowledge the poor have about their own reality. By comparing and contrasting findings from participatory methods with findings from more conventional household consumption and expenditure surveys, the study identifies poverty indicators used by local people at the village level. It also shows how using these measures leads to different conclusions about the causes and nature of poverty and reveals the policy and institutional methods that can best address the problem and how development policies must take gender differences into account if they are to be effective. The study also demystifies the concept of social capital at the local level and provides quantifiable evidence that village-level social capital -- membership in groups with particular characteristics -- significantly affects household welfare.
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