Welfare-Consistent Global Poverty Measures

Produced by: 
The World Bank
Available from: 
August 2017
Paper author(s): 
Martin Ravallion
Shaohua Chen
Topic: 
Poverty - Inequality - Aid Effectiveness
Year: 
2018

The paper provides new measures of global poverty that take seriously the idea of relative-income comparisons but also acknowledge a deep identification problem when the latent norms defining poverty vary systematically across countries. Welfare-consistent measures are shown to be bounded below by a fixed absolute line and above by weakly-relative lines derived from a theoretical model of relative-income comparisons calibrated to data on national poverty lines. Both bounds indicate falling global poverty incidence, but more slowly for the upper bound. Either way, the developing world has a higher poverty incidence but is making more progress against poverty than the developed world.

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Research section: 
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