|Recent years have witnessed a lively debate on the measurement of global poverty and its trends. Is global poverty decreasing? Is it increasing? At what rate?
Global poverty numbers, published by Chen and Ravallion at the World Bank in 2001, were criticized by some for underestimating poverty, by others for overestimating poverty.
Studies by Bhalla (2002) and Sala-i-Martin (2002) argue that the number of people living in extreme poverty has fallen more sharply than as indicated by World Bank estimates. Bhalla’s estimates suggest that the first Millennium Development Goal (MDG) of halving the 1990 “$1 a day” poverty rate by 2015 was in fact reached in 2000.
Other studies still, such as Reddy and Pogge (2002) and Wade (2002), indicate that the rate of decline in poverty is overstated by World Bank estimates.
How are these diverging assessments to be explained?
Assessments of global poverty levels and trends differ for two reasons mainly. They depend on the underlying definition or understanding of global poverty used and on the methodology adopted (even when there is agreement on the concept being measured).
In terms of methodology, global poverty estimates will vary according to the type of data sources used (national accounts data or household survey data); on the variable being measured (income and/or consumption); on the price adjustments used across time and space (use of purchasing power parities, PPPs); on the unit of analysis (individual or household); on the treatment of missing and zero incomes and of income misreporting.
For a non-technical commentary on the conceptual and methodological differences underlying the “numbers debate” on globalization by Martin Ravallion, see: “The Debate on Globalization, Poverty, and Inequality: Why Measurement Matters.”
For a list of papers on global poverty measurement see:
A similar debate on the measurement of inequality is ongoing. For more information see:
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