A global count of the extreme poor in 2012: data issues, methodology and initial results

By Francisco H. G. Ferreira, Shaohua Chen, Andrew L. Dabalen, Y. Dikhanov, Nada Hamadeh, Dean Jolliffe, Ambar Narayan, Espen B. Prydz, Ana Revenga, P. Sangraula and 2 more. Journal of Economic Inequality, 2015

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The 2014 release of a new set of purchasing power parity (PPP) conversion factors (PPPs) for 2011 has prompted a revision of the World Bank’s international poverty line. In revising the line, we have sought to minimize changes to the real purchasing power of the earlier $1.25 line (in 2005 PPPs), so as to preserve the integrity of the goalposts for international targets such as the Sustainable Development Goals (SDGs) and the World Bank’s twin goals – which were set with respect to that line. In particular, the new line was obtained by inflating the same fifteen national poverty lines – originally used by Ravallion et al. (World Bank Econ. Rev. 23(2): 163–184 2009) to construct the $1.25 line – to 2011 prices in local currency units, and then converting them to US dollars using 2011 PPP conversion factors. With a small approximation, this procedure yields a new international poverty line of $1.90 per person per day. In combination with other changes described in the paper, this revision leads to relatively small changes in global poverty incidence for 2011: from 14.5 % using the old method to 14.1 % using the new method. In 2012, the new reference year for the global count, we find 12.7 % of the world’s population, or 897 million people, are living in extreme poverty. There are changes in the regional composition of poverty, but they are also relatively small. This paper documents methodological decisions taken in the process of updating both the poverty line and the consumption and income distributions at the country level, including issues of inter-temporal and spatial price adjustments. It also describes various caveats and limitations of the approach taken.

Subfields: Safety Research, Sociology and Political Science, Soil Science

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Citations in the corpus

Absolute Poverty: When Necessity Displaces Desire (2017, background): “The statistical origins of the WBPL give rise to many of its difficulties.”
Rebasing 'Maddison' : new income comparisons and the shape of long-run economic development (2018, methodology): “For those countries we use the (econometrically) estimated real GDP per capita level from World Bank (2014).”
China’s poverty alleviation over the last 40 years: successes and challenges (2019, methodology): “For example, according to the World Bank’s research, China’s rural purchasing power parity (PPP) conversion factor in 2011 is $1, equals 3.04 yuan (Ferreira et al. 2016).”
Changes Over Time in Multidimensional Poverty: Methodology and Results for 34 Countries (2017, methodology): “Klasen (2014). They found comparisons using the DHS datasets to be particularly robust, hence this paper restricts analyses to DHS datasets.”
Ending Extreme Poverty and Sharing Prosperity: Progress and Policies (2015, background): “End notes * Ferreira et al. (2015) provide additional information on data issues and methodology. a See Ravallion, Chen and Sangraula (2009) for details on the sample of 74 countries and how the 15 were selected. See Jolliffe and Prydz (2015) for more discussion on methodology for updating the globa”
Trade-offs between social and environmental Sustainable Development Goals (2018, background): “90 a day, as recently suggested (Ferreira et al., 2016), increases carbon, land, and water footprints by 1.”
Land productivity and plot size : is measurement error driving the inverse relationship ? (2017, positive): “This relationship, observed in many Sub-Saharan African countries, states that smaller plots are more productive than larger plots, even within a farm household (Ali and Deininger, 2015; Assunção and Braido, 2007; Barrett et al., 2010).”
Lives and livelihoods: Estimates of the global mortality and poverty effects of the Covid-19 pandemic (2020, background): “This effect is emphasized when using a common poverty line for all countries, such as the international extreme poverty line (IPL) of $1.90 a day (Ferreira et al., 2016).”