Update on global poverty figures – another 400 million below the poverty line

As discussed in my previous blog, the World Bank has now issued its revised global poverty numbers. These have been recalculated to respond to its improved measure of ‘purchasing power parity’, which rebalances figures for GDP to allow for the fact that the price of goods and services varies between countries (i.e. a haircut in Sierra Leone costs a lot less than a haircut in Norway).

The headlines are that the estimated number of people below the absolute ‘dollar a day’ poverty line is 1,400 million, not 1,000 million as previously thought. And that is before the impact of the current food price crisis, which the Bank estimates will push a further 100 million into poverty, bringing the grand total to 1.5 billion. The number crunchers have backdated the revisions to 1981, revising the figure for that year from 1.5 billion to 1.9 billion. They have also revised the line itself upwards slightly, to $1.25 a day, to adjust for inflation.

The Bank reckons the world is still on course to meet Millennium Development Goal 1 (to halve absolute poverty between 1990 and 2015), but the new estimates suggest that poverty is both more persistent, and has fallen less sharply, than previously thought. Thankfully, no-one on the ground will feel any more poor as a result of this kind of statistical revision!

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Comments

2 Responses to “Update on global poverty figures – another 400 million below the poverty line”
  1. Duncan

    I’m afraid you have slightly mistated the numbers in a valiant effort to present them simply.

    Adjusting for inflation would take the poverty line to $1.45 a day (not $1.25 as in your post.) But the authors have also decided that the old $1.08 figure was too high as a measure of absolute poverty, so they have adjusted the poverty line down to $1.25. So the new poverty line does not, as you have said, adjust for inflation.

    If the authors had not reduced the absolute level of the poverty line, the increase in the numbers living in poverty would have gone from 985 million to 1.7 billion. But because they have revised down the poverty threshold, the estimated number is “only” 1.4 billion.

    I think it is pretty extraordinary that we can have been out by a factor of two on our estimates of the number of people living below the previous poverty line.

    Regards
    Owen
    (in a spirit of conversation!)