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International Income Poverty Measurement: Which way now?

Author

Listed:
  • Stephan Klasen

    (Georg-August-University Göttingen)

  • Tatyana Krivobokova

    (Georg-August-University Göttingen)

  • Friederike Greb

    (Food and Agricultural Organization, Rome)

  • Rahul Lahoti

    (Georg-August-University Göttingen)

  • Syamsul Hidayat Pasaribu

    (Bogor Agricultural University)

  • Manuel Wiesenfarth

    (German Cancer Research Center, Heidelberg)

Abstract
In this paper, we critically review conceptual and empirical issues surrounding the derivation of the international poverty line, expressed in PPP-adjusted dollars and linked to various rounds of the International Comparison of Prices (ICP). We find that there are some limitations in the current estimation of these lines, but show that statistically superior methods lead to lines that are relatively robust and confirm the $1.25 using 2005PPPs and suggest $1.67-1.71 using 2011PPPs; they also roughly confirm the current shape of the proposed 'weakly relative' poverty line. Using the new absolute line using 2011 PPPs would lead to substantially lower poverty in our estimation. The extent of the decline depends on whether and how one treats China, India, and Indonesia differently from other countries in the 2005 and 2011 PPPs. More seriously, we note that the dependence on the conceptual and empirical problems associated with the link to successive ICP rounds creates problems that have gotten worse over time so that we suggest that it would be best to consider alternatives to the current reliance on ICP rounds and the resulting PPPs. As a quick fix we propose to fix the international poverty line in national currencies using either the 2005 or 2011 level; in the medium term, we argue for global poverty measurement based on internationally coordinated national poverty measurement.

Suggested Citation

  • Stephan Klasen & Tatyana Krivobokova & Friederike Greb & Rahul Lahoti & Syamsul Hidayat Pasaribu & Manuel Wiesenfarth, 2015. "International Income Poverty Measurement: Which way now?," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 184, Courant Research Centre PEG.
    • Handle: RePEc:got:gotcrc:184
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Francisco H. G. Ferreira & Shaohua Chen & Andrew Dabalen & Yuri Dikhanov & Nada Hamadeh & Dean Jolliffe & Ambar Narayan & Espen Beer Prydz & Ana Revenga & Prem Sangraula & Umar Serajuddin & Nobuo Yosh, 2016. "A global count of the extreme poor in 2012: data issues, methodology and initial results," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 14(2), pages 141-172, June.
    2. Martin Ravallion, 2016. "Toward better global poverty measures," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 14(2), pages 227-248, June.
    3. Hanjie Wang & Qiran Zhao & Yunli Bai & Linxiu Zhang & Xiaohua Yu, 2020. "Poverty and Subjective Poverty in Rural China," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 150(1), pages 219-242, July.
    4. Dean Jolliffe & Espen Beer Prydz, 2016. "Estimating international poverty lines from comparable national thresholds," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 14(2), pages 185-198, June.
    5. Ravallion, Martin & Chen, Shaohua, 2019. "Global poverty measurement when relative income matters," Journal of Public Economics, Elsevier, vol. 177(C), pages 1-1.
    6. Moatsos, Michail, 2020. "Why PPP exchange rates should be avoided in global poverty estimates," EconStor Preprints 218972, ZBW - Leibniz Information Centre for Economics.
    7. Moatsos, Michail & Lazopoulos, Achillefs, 2021. "Global poverty: A first estimation of its uncertainty," World Development Perspectives, Elsevier, vol. 22(C).
    8. Sophia Kan & Simon Lange, 2021. "An appreciation of Professor Stephan Klasen and his contribution to development economics," Review of Development Economics, Wiley Blackwell, vol. 25(1), pages 104-115, February.
    9. S. O. Falana & S. D. Salako & S. M. Akinsanya & L. O. Awoyinka & A. Salaudeen & O. J. Adewoye, 2024. "Foreign Aid, Remittances and Poverty in Sub-Saharan Africa (2007-2018)," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 11(8), pages 698-725, August.

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    More about this item

    Keywords

    poverty; World Bank; dollar-a-day; weakly relative poverty;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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