to calculate absolute poverty at international level for the year 2015 how much daily income was adopted
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Fact Sheet: An Adjustment to Global Poverty Lines
As differences in price levels across the world evolve, the global poverty line has to be periodically updated to reflect these changes. Since 2015, the last update, we have used $1.90 as the global line. As of fall 2022, the new global line will be updated to $2.15.
FACTSHEET
Fact Sheet: An Adjustment to Global Poverty Lines
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The World Bank updated the global poverty lines in September 2022. The decision, announced in May, follows the release in 2020 of new purchasing power parities (PPPs)—the main data used to convert different currencies into a common, comparable unit and account for price differences across countries. The new extreme poverty line of $2.15 per person per day, which replaces the $1.90 poverty line, is based on 2017 PPPs. Here you find more information about this change and what it means for measuring global poverty.
Why did the World Bank decide to update the International Poverty Line, and why now?
What is the new poverty line, and based on this new measure, how many people are living in extreme poverty in the world?
Why raise the poverty line? What was wrong with the $1.90 a day line that we are all used to?
What does this mean for previous estimates?
What is Purchasing Power Parity (PPP) and how is it determined?
Should I use this new poverty line to plan programs and policies in my country?
Doesn’t this put too much emphasis on money? What about the other dimensions of poverty?
Is it still possible for the World Bank to meet its goal to reduce extreme poverty to 3% (or less) by 2030?
How is the international poverty line derived?
How do the 2017 PPPs change global, regional, country-level estimates of extreme poverty?
Why has the international poverty line increased from $1.90 to $2.15, yet global poverty has remained virtually unchanged?
What other poverty lines do the World Bank use in tracking progress against global poverty?
What accounts for the changes in the number of poor people at the three poverty lines?
Will the UN’s Sustainable Development Goal (SDG) 1.1 target be monitored based on the World Bank’s updated international poverty line?
When will be the next update of PPP data?
With the adoption of the 2017 PPPs, will the 2011 PPPs no longer be used for measuring global poverty?
What was the recommendation of the Commission on Global Poverty regarding the update of the international poverty line with new PPP data?
What is the main source of change in the international poverty line from $1.90 to $2.15?
Last updated: Sep 14, 2022
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The international poverty line has just been raised to $1.90 a day, but global poverty is basically unchanged. How is that even possible?
World Bank researchers have been trying to assess the extent of extreme poverty across the world since 1979 and more systematically since the World Development Report 1990, which introduced the dollar-a-day international poverty line. From the beginning, the idea was to measure income poverty with respect to a demanding line ...
The international poverty line has just been raised to $1.90 a day, but global poverty is basically unchanged. How is that even possible?
FRANCISCO FERREIRADEAN MITCHELL JOLLIFFEESPEN BEER PRYDZ|OCTOBER 04, 2015
This page in:
12
World Bank researchers have been trying to assess the extent of extreme poverty across the world since 1979 and more systematically since the World Development Report 1990, which introduced the dollar-a-day international poverty line. From the beginning, the idea was to measure income poverty with respect to a demanding line which, first, reflects the standards of absolute poverty in the world’s poorest countries and, second, corresponded to the same real level of well-being in all countries. The first requirement led researchers to anchor the international poverty line on the national poverty lines of very poor developing countries. And the second requirement led them to use purchasing power parity exchange rates (PPPs) – rather than nominal ones - to convert the line into the US dollar and, more importantly, into the currencies of each developing country.
Although both requirements are sensible, they do have some troublesome implications… In particular, they have led us to adjust the line every time a new (and hopefully improved) set of PPPs is produced. PPP exchange rates are currently produced by an independent consortium called the International Comparison Program (ICP), which periodically revises its estimates – reflecting both changes in relative price levels across countries and methodological changes. The dollar-a-day line, created by Ravallion et al. (1991), used 1985 PPPs. When a new set of PPPs was published in 1993, the line changed to $1.08 per day. PPPs were revised again in 2005, and the line was correspondingly upped to $1.25. Every time this happened, there were real comparability challenges, and international poverty rates were revised for individual countries and for the world.
Last year, the ICP published yet another new set of PPPs, for prices collected in 2011. Though there was some disagreement among scholars, the dominant view is that these new PPPs represent an improvement over the 2005 set, creating the need for another revision to the Bank’s international poverty line. The challenge was: over time, the Bank’s international poverty line had begun to serve as a benchmark for the definition of high-level policy goals for the international community, such as the first Millennium Development Goal. More recently, the first overarching goal of the World Bank itself - reducing the global incidence of extreme poverty to 3% by 2030 – was set in terms of “those living under $1.25 per person per day, at 2005 PPPs”. The same is true of the first Sustainable Development Goal, to which world leaders signed up at the UN just over a week ago.
So, if the 2011 PPPs provide a more accurate description of the real cost of living in different countries, our measures of global poverty should incorporate them. But that had to be done in a way that avoided moving the goalposts set for the Bank’s own goals, as well as those enshrined in the UN’s Sustainable Development Goals. In fact, we felt we had to follow three basic principles for setting the new line:
Use the most accurate and recent set of prices available to compare the real standards of living across countries.
Minimize changes to the goalposts: keep the definition of the line unchanged, and its new value as close as possible to the $1.25 line in real terms.
When defining “real terms”, the price levels that matter most for measuring global poverty are those faced by the world’s poorest people.
Those principles led to a very simple decision rule for updating the line:
The $1.25 line was originally defined as the simple average of the national poverty lines for fifteen very poor countries (see Ravallion et al. 2009). We take those same exact lines (expressed in local currency units at 2005 prices), and inflate them to 2011 using each country’s own consumer price index.
Then, once they are in 2011 prices, we convert them to the US dollar using the 2011 PPPs, and take a simple average (as before).
The result of those two very simple operations yields $1.88 per person per day, which we round up to $1.90 – the World Bank’s new international poverty line. There are, of course, a number of methodological details: some countries have more than one CPI available for use – which one should be chosen? There are differences in the costs of living within countries – which in some cases are not fully captured by the ICP price surveys. How should these differences be dealt with? How do we deal with countries for which PPP and CPI data suggest very different changes in prices between 2005 and 2011? We document our methodological choices on these – and other – matters in (possibly excruciating) detail here , so others can replicate our results. The paper also reports on a number of “robustness checks”. For example, if we took all 101 countries for which we have the necessary information, converted $1.25 into their local currency units in 2005 (using the 2005 PPPs), inflated those values to local 2011 prices using domestic CPIs, then converted them back to the US dollar using the 2011 PPPs, and finally took a simple average, what would we get? You guessed it: $1.90.
Now, once income and consumption distributions (which we have for 132 countries in PovcalNet) are compared to the new line (using, evidently, 2011 PPPs), global poverty is re-estimated. Bank reports released on October 4th list the global and regional incidence of poverty for 2011 and 2012, as well as projections for 2015. For the purposes of gauging the effect of the change in PPPs (and the corresponding update in the poverty line), it is best to focus on 2011, a year for which we have estimates using both $1.90 (at 2011 PPPs) and $1.25 (at 2005 PPPs). For that year, our estimate of global poverty incidence falls from 14.5% of the world’s population (or 1,011 million people) under the old method, to 14.2% (or 987 million) under the new. A comparison of levels and trends - for the five regions for which we are confident enough to report results - is shown in the Figure below.
Poverty
How has poverty changed over time? And what can the world do to win the fight against poverty?
Poverty
by Joe Hasell, Max Roser, Esteban Ortiz-Ospina and Pablo Arriagada
Reuse our work freelyCite this research
Global poverty is one of the most pressing problems that the world faces today. The poorest in the world are often undernourished, without access to basic services such as electricity and safe drinking water; they have less access to education, and suffer from much poorer health.
In order to make progress against such poverty in the future, we need to understand poverty around the world today and how it has changed.
On this page you can find all our data, visualizations and writing relating to poverty. This work aims to help you understand the scale of the problem today; where progress has been achieved and where it has not; what can be done to make progress against poverty in the future; and the methods behind the data on which this knowledge is based.
Download Poverty data on GitHub
Key insights on Poverty
Measuring global poverty in an unequal world
There is no single definition of poverty. Our understanding of the extent of poverty and how it is changing depends on which definition we have in mind.
In particular, richer and poorer countries set very different poverty lines in order to measure poverty in a way that is informative and relevant to the level of incomes of their citizens.
For instance, while in the United States a person is counted as being in poverty if they live on less than roughly $24.55 per day, in Ethiopia the poverty line is set more than 10 times lower – at $2.04 per day. You can read more about how these comparable national poverty lines are calculated in this footnote.1
To measure poverty globally, however, we need to apply a poverty line that is consistent across countries.
This is the goal of the International Poverty Line of $2.15 per day – shown in red in the chart – which is set by the World Bank and used by the UN to monitor extreme poverty around the world.
We see that, in global terms, this is an extremely low threshold indeed – set to reflect the poverty lines adopted nationally in the world’s poorest countries. It marks an incredibly low standard of living – a level of income much lower than just the cost of a healthy diet.
From $1.90 to $2.15 a day: the updated International Poverty Line
Read more
WHAT YOU SHOULD KNOW ABOUT THIS DATA
Global poverty data relies on national household surveys that have differences affecting their comparability across countries or over time. Here the data for the US relates to incomes and the data for other countries relates to consumption expenditure.2
The poverty lines here are an approximation of national definitions of poverty, made in order to allow comparisons across the countries.3
Non-market sources of income, including food grown by subsistence farmers for their own consumption, are taken into account.4
Data is measured in 2017 international-$, which means that inflation and differences in the cost of living across countries are taken into account.5
Explore data on Poverty
Poverty Data Explorer of World Bank data
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About this data
All the data included in this explorer is available to download in GitHub, alongside a range of other poverty and inequality metrics.
Where is this data sourced from?
This data explorer is collated and adapted from the World Bank’s Poverty and Inequality Platform (PIP).
Research & Writing
Extreme poverty: how far have we come, how far do we still have to go?
Despite making immense progress against extreme poverty, it is still the reality for every tenth person in the world.
Max Roser
$2.15 a day: the updated International Poverty Line
What does the World Bank’s updated methods mean for our understanding of global poverty?
Joe Hasell
MORE KEY ARTICLES ON POVERTY
The history of the end of poverty has just begun
Max Roser
The economies that are home to the poorest billions of people need to grow if we want global poverty to decline substantially
Max Roser
Most of us are wrong about how the world has changed (especially those who are pessimistic about the future)
Max Roser
GLOBAL POVERTY OVER THE LONG-RUN
The history of the end of poverty has just begun
Max Roser
How do we know the history of extreme poverty?
Joe Hasell and Max Roser
Breaking out of the Malthusian trap: How pandemics allow us to understand why our ancestors were stuck in poverty
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