Measuring global poverty in an unequal world

 

Measuring global poverty in an unequal world

by Joe Hasell, Max Roser, Esteban Ortiz-Ospina and Pablo Arriagada

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
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METHODS & DATA QUALITY

• 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