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Measuring poverty requires adjusting nominal consumption (or income) into a real value of consumption, across geographic areas and over time. To this end, data on consumer prices are used to construct a price index. There are a range of approaches to do this, from using the consumer price index, to survey-based unit values, which differ in the underlying sources of price data and methodologies for indexing. These different approaches can have large impacts on poverty measures and trends. Surprisingly little attention has been focused on this topic. This study reviews a range of issues and the evidence on how prices matter for measuring poverty, particularly in Africa. It draws on a wide literature, much from developed countries, and offers suggestions for future work in this area.

This paper contributes to the methodological literature on the estimation of poverty lines for country poverty comparisons in Latin America and the Caribbean. The paper exploits a unique, comprehensive data set of 86 up-to-date urban official extreme and moderate poverty lines across 18 countries in Latin America and the Caribbean, as well as the recent values of the national purchasing power parity conversion factors from the 2011 International Comparison Program and a set of harmonized household surveys that are part of the Socio-Economic Database for Latin America and the Caribbean project. Because of the dispersion of country-specific poverty lines, the paper concludes that the value of a regional poverty line largely depends on the selected aggregation method, which ends up having a direct impact on the estimation of regional extreme and moderate poverty headcounts.

With 2015 marking the transition from the Millennium to the Sustainable Development Goals, the international community can celebrate many development successes since 2000. Three key challenges stand out: the depth of remaining poverty, the unevenness in shared prosperity, and the persistent disparities in non-income dimensions of development. First, the policy discourse needs to focus more directly on the poorest among the poor. While pockets of ultra-poverty exist around the world, Sub-Saharan Africa is home to most of the deeply poor. To make depth a more central element in policy formulation, easy-to-communicate measures are needed, and this note attempts a step in this direction with person-equivalent measures of poverty. Second, the eradication of poverty in all of its forms requires steady growth of the incomes of the bottom 40 percent. Yet, economic growth, a key driver of shared prosperity, may not be as buoyant as before the global financial crisis. Third, unequal progress in non-income dimensions of development requires addressing widespread inequality of opportunity, which transmits poverty across generations and erodes the pace and sustainability of progress for the bottom 40. To meet these challenges, three ingredients are core to the policy agenda: sustaining broad-based growth, investing in human development, and insuring the poor and vulnerable against emerging risks.

The 2014 release of a new set of purchasing power parity conversion factors (PPPs) for 2011 has prompted a revision of the international poverty line. In order to preserve the integrity of the goalposts for international targets such as the Sustainable Development Goals and the World Bank’s twin goals, the new poverty line was chosen so as to preserve the definition and real purchasing power of the earlier $1.25 line (in 2005 PPPs) in poor countries. Using the new 2011 PPPs, the new line equals $1.90 per person per day. The higher value of the line in US dollars reflects the fact that the new PPPs yield a relatively lower purchasing power of that currency vis-à-vis those of most poor countries. Because the line was designed to preserve real purchasing power in poor countries, the revisions lead to relatively small changes in global poverty incidence: from 14.5 percent in the old method to 14.1 percent in the new method for 2011. In 2012, the new reference year for the global count, we find 12.7 percent 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 the detailed 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, limitations, perils and pitfalls of the approach taken.

Many challenges were identified during the Fifth National Development Plan (FNDP) in Zambia. To address these challenges and realize pro-poor growth, the Sixth National Development Plan (SNDP) was set in motion. The SNDP, which covers 2011 to 2015, was designed to accomplish three goals: to accelerate infrastructure development (roads, bridges, air, water, rail and border infrastructure, feeder roads, water canals, tourist access roads), to improve the provision of basic services including water and sanitation, electricity access, health, education and skills development to promote rural investment; and to accelerate poverty reduction, mainly through the continued implementation of the Rural Finance Program and to enhance human development.

This paper provides an overview of poverty measurement issues in Vietnam for the non-specialist. Vietnam has two main approaches to measuring poverty. An income-based approach is used by the Ministry of Labor, Invalids, and Social Affairs to generate a classification used for determining anti-poverty program eligibility as well as poverty monitoring over the short term. A separate consumption-based approach has been used by the General Statistics Office and the World Bank (GSO-WB), principally to examine poverty changes over the longer run. These national poverty lines are distinct from the $1.25-a-day and $2-a-day international poverty lines. Vietnam s GSO-WB national poverty line is similar in purchasing power parity terms to that of other countries with similar levels of development. Simple projections of poverty rates through 2020 imply that the GSO-WB poverty rate will fall from a 2012 level of 17.2 percent to below 10 percent by 2020, and that over a third of ethnic minorities will still be poor despite large poverty reduction gains.

What happened to poverty in India in the 1990s has been fiercely debated, both politically and statistically. The debate has run parallel to the wider debate about globalization and poverty in the 1990s and is also an important part of that debate. The economic reforms of the early 1990s in India were followed by rates of economic growth that were high by historical standards. The effects on poverty remain controversial, however. The official numbers published by the government of India, showing acceleration in the rate of poverty reduction from 36 percent of the population in 1993 to 1994 to 26 percent in 1999 to 2000, have been challenged for showing both too little and too much poverty reduction. The various claims have often been frankly political, but there are also many important statistical issues. The debate, reviewed in this article, provides an excellent example of how politics and statistics interact in an important, largely domestic debate. Although there is no consensus on what happened to poverty in India in the 1990s, there is good evidence both that poverty fell and that the official estimates of poverty reduction are too optimistic, particularly for rural India. The issues covered in this article, although concerned with the measurement of poverty in India, have wide international relevance discrepancies between surveys and national accounts, the effects of questionnaire design, reporting periods, survey nonresponse, repair of imperfect data, choice of poverty lines, and interplay between statistics and politics.

The report starts with an overview of poverty and inequality estimates in chapter one, focusing on the trends in poverty and the distributional pattern of growth between 2002-3 and 2012-13. Chapter two then provides a description of the poverty profile by geographical and household characteristics, both in terms of the levels of poverty and its rate of change. Consumption patterns are presented in chapter three, and other socio-economic characteristics describing the living conditions of households are presented in chapter four, which is then followed by a chapter detailing the conclusions that can be drawn from this initial poverty profile analysis. The annexes provide additional detail. Annex one provides a detailed technical explanation of the methodology for measuring poverty while annex two presents sensitivity analysis for the poverty estimates including the confidence intervals of these estimates. Annex three provides additional tables and figures on poverty and inequality including other measures of poverty.

As recent discussions have made clear, the apparent lack of poverty reduction in the face of historically high rates of economic growth—both in the world as a whole and in specific countries (most notably India)—provides fuel for the argument that economic growth does little to reduce poverty. How confident can we be that the data actually support these inferences? At the international level, the regular revision of purchasing power parity exchange rates plays havoc with the poverty estimates, changing them in ways that have little or nothing to do with the actual experience of the poor. At the domestic level, the problems in measuring poverty are important not only for the world count but also for tracking income poverty within individual countries. Yet, in many countries, there are large and growing discrepancies between the survey data—the source of poverty counts—and the national accounts—the source of the measure of economic growth. Thus economic growth, as measured, has at best a weak relationship with poverty, as measured. The World Bank prepares and publishes estimates of the number of poor people in the world. Although these numbers should be taken with a pinch of salt, they are arguably important. In an institution where the reduction of poverty is the paramount objective, some overall yardstick of progress (or the lack of it) is required. The numbers are frequently quoted by politicians and by leaders of international organizations, including the World Bank itself, who believe the numbers are effective for advocacy. Indeed, there is a long history of studies of poverty mobilizing support among the nonpoor for antipoverty policies. So it is important to know whether the world and national poverty counts are sound enough to support these uses. As recent discussions have made clear, the apparent lack of poverty reduction in the face of historically high rates of economic growth—both in the world as a whole and in specific countries (most notably India)—is providing fuel for the argument that economic growth does little to reduce poverty. How confident can we be that the data actually support these inferences? Are the changes in the poverty counts sufficiently well measured to support conclusions about growth and poverty reduction? Should