(C) Our World in Data
This story was originally published by Our World in Data and is unaltered.
 . . . . . . . . . .



Share of population living in extreme poverty [1]

['Max Roser']

Date: 2024-06 

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.4

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.

How does the World Bank set the International Poverty Line?

The exact method used by the World Bank to set the International Poverty Line has changed somewhat over past updates. But each time the objective has been broadly the same – to find a “typical standard by which the poorest countries of the world judge their citizens to be impoverished.”5

The method used in the latest update to arrive at a figure of $2.15, measured in 2017 international-$, is based on a set of harmonized national poverty lines produced by Dean Joliffe and others – shown in the chart here.

As you can see, there is a strong correlation between the poverty lines countries set, shown on the Y axis, and their income level – as measured here by GDP per capita, and plotted along the X axis.

The International Poverty Line is calculated as the median national poverty line adopted among low-income countries – using the World Bank’s income classification system. These are the countries shaded in red in the chart and found in the bottom left corner.

Although the International Poverty Line is by far the most prominent international line, the same method is also used by the World Bank to set two higher poverty lines that reflect the national definitions adopted in lower-middle and upper-middle income groups shown in green and purple respectively. The median poverty line among these two groups of countries are $3.65 and $6.85, and these form the World Bank’s lower-middle income and upper middle-income poverty lines.

You can read more about the methodology used to set these lines in the World Bank’s flagship report on poverty, Poverty and Shared Prosperity.

[END]
---
[1] Url: https://ourworldindata.org/grapher/share-of-population-in-extreme-poverty?tab=chart&facet=none&country=Sub-Saharan+Africa+%28PIP%29~East+Asia+and+Pacific+%28PIP%29

Published and (C) by Our World in Data
Content appears here under this condition or license: Creative Commons BY.

via Magical.Fish Gopher News Feeds:
gopher://magical.fish/1/feeds/news/ourworldindata/