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The Journal of Economic Inequality

, Volume 14, Issue 2, pp 141–172 | Cite as

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

  • Francisco H. G. Ferreira
  • Shaohua Chen
  • Andrew Dabalen
  • Yuri Dikhanov
  • Nada Hamadeh
  • Dean JolliffeEmail author
  • Ambar Narayan
  • Espen Beer Prydz
  • Ana Revenga
  • Prem Sangraula
  • Umar Serajuddin
  • Nobuo Yoshida
Open Access
Article

Abstract

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.

Keywords

Global poverty Poverty measurement Purchasing power parity 

Supplementary material

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© The Author(s) 2016

Open AccessThis article is distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made.

Authors and Affiliations

  • Francisco H. G. Ferreira
    • 1
  • Shaohua Chen
    • 1
  • Andrew Dabalen
    • 2
  • Yuri Dikhanov
    • 3
  • Nada Hamadeh
    • 3
  • Dean Jolliffe
    • 1
    Email author
  • Ambar Narayan
    • 2
  • Espen Beer Prydz
    • 1
  • Ana Revenga
    • 2
  • Prem Sangraula
    • 1
  • Umar Serajuddin
    • 3
  • Nobuo Yoshida
    • 2
  1. 1.Development Economics Research GroupThe World BankWashingtonUSA
  2. 2.Poverty and Equity Global PracticeThe World BankWashingtonUSA
  3. 3.Development Economics Data GroupThe World BankWashingtonUSA

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