2.7
Poverty
National poverty line
Population below the
poverty line
Survey
year
Afghanistan
Albania
Algeria
Angola
Argentina
Armenia
Australia
Austria
Azerbaijan
Bangladesh
Belarus
Belgium
Benin
Bolivia
Bosnia and Herzegovina
Botswana
Brazil
Bulgaria
Burkina Faso
Burundi
Cambodia
Cameroon
Canada
Central African Republic
Chad
Chile
China
Hong Kong, China
Colombia
Congo, Dem. Rep.
Congo, Rep.
Costa Rica
Côte d’Ivoire
Croatia
Cuba
Czech Republic
Denmark
Dominican Republic
Ecuador
Egypt, Arab Rep.
El Salvador
Eritrea
Estonia
Ethiopia
Finland
France
Gabon
Gambia, The
Georgia
Germany
Ghana
Greece
Guatemala
Guinea
Guinea-Bissau
Haiti
70
2002
1988
1995
1998–99
1995
1995–96
2000
1995
1997
2001–02
1996
1997
1998
1990
1997
1996
1995–96
1996
1996
1995
1992
1992
1995
1995–96
1992
1993–94
1995
1995–96
1992
2002
1992
1989
1994
1987
Population below the
poverty line
Rural
%
Urban
%
National
%
..
29.6
16.6
..
..
50.8
..
..
..
55.2
..
..
25.2
77.3
19.9
..
54.0
..
61.1
36.0
40.1
59.6
..
..
67.0
..
7.9
..
79.0
..
..
25.5
..
..
..
..
..
49.0
56.0
23.3
55.7
..
14.7
47.0
..
..
..
..
55.4
..
..
..
71.9
..
..
..
..
19.8
7.3
..
28.4
58.3
..
..
..
29.4
..
..
28.5
53.8
13.8
..
15.4
..
22.4
43.0
21.1
41.4
..
..
63.0
..
<2
..
48.0
..
..
19.2
..
..
..
..
..
19.3
19.0
22.5
43.1
..
6.8
33.3
..
..
..
..
48.5
..
..
..
33.7
..
..
..
..
25.4
12.2
..
2006 World Development Indicators
International poverty line
55.1
..
..
68.1
51.0
41.9
..
26.5
63.2
19.5
..
23.9
36.0
54.6
36.4
36.1
53.3
..
..
64.0
19.9
6.0
..
60.0
..
..
22.0
..
..
..
..
..
33.9
34.0
22.9
48.3
53.0
8.9
45.5
..
..
..
64.0
52.1
..
50.0
..
57.9
40.0
..
65.0
Survey
year
1995
1998
2001
2001
2000
1999
1999
1998
2001
2003
1999
2001
1998
1998
1999
1998
1998
1999–2000
1999–2000
1998
2003
1998–99
2000
1995
Rural
%
Urban
%
National
%
..
..
30.3
..
..
48.7
..
..
42.0
53.0
..
..
33.0
81.7
..
..
51.4
..
52.4
..
40.1
49.9
..
..
..
..
4.6
..
79.0
..
..
..
..
..
..
..
..
42.1
69.0
..
..
..
..
45.0
..
..
..
61.0
52.7
..
49.9
..
74.5
..
..
66.0
..
..
14.7
..
29.9
51.9
..
..
55.0
36.6
..
..
23.3
50.6
..
..
14.7
..
19.2
..
13.9
22.1
..
..
..
..
<2
..
55.0
..
..
..
..
..
..
..
..
20.5
30.0
..
..
..
..
37.0
..
..
..
48.0
56.2
..
18.6
..
27.1
..
..
..
..
..
22.6
..
..
50.9
..
..
49.0
49.8
..
..
29.0
62.7
..
..
22.0
12.8
46.4
..
35.9
40.2
..
..
..
17.0
4.6
..
64.0
..
..
..
..
..
..
..
..
28.6
46.0
16.7
..
..
..
44.2
..
..
..
57.6
54.5
..
39.5
..
56.2
..
..
..
Survey
year
2002a
1995a
2003 b
2003a
2002a
2000a
2002a
2003a
2002b
1993a
2003 b
2003a
2003a
1998a
1997a
2001a
1993a
2000 b
2001a
2003 b
2001b
2002a
2001a
1996b
2003 b
1998 b
1999–2000a
2002b
2003a
1999–2000a
1998a
2003a
1998–99a
2002b
2001b
Population
below
$1 a day
%
..
<2
<2
..
7.0
<2
..
..
<2
36.0
<2
..
30.9
23.2
..
23.5
7.5
<2
27.2
54.6
34.1
17.1
..
66.6
..
<2
16.6
..
7.0
..
..
2.2
14.8
<2
..
<2
..
2.5
15.8
3.1
19.0
..
<2
23.0
..
..
..
59.3
6.5
..
44.8
..
13.5
..
..
53.9
Poverty
gap at
$1 a day
%
..
<0.5
<0.5
..
2.0
<0.5
..
..
<0.5
8.1
<0.5
..
8.2
13.6
..
7.7
3.4
<0.5
7.3
22.7
9.7
4.1
..
38.1
..
<0.5
3.9
..
3.1
..
..
0.8
4.1
<0.5
..
<0.5
..
0.8
6.3
<0.5
9.3
..
<0.5
4.8
..
..
..
28.8
2.1
..
17.3
..
5.5
..
..
26.6
Population
below
$2 a day
%
..
11.8
15.1
..
23.0
31.1
..
..
<2
82.8
<2
..
73.7
42.2
..
50.1
21.2
6.1
71.8
87.6
77.7
50.6
..
84.0
..
9.6
46.7
..
17.8
..
..
7.5
48.8
<2
..
<2
..
11.0
37.2
43.9
40.6
..
7.5
77.8
..
..
..
82.9
25.3
..
78.5
..
31.9
..
..
78.0
Poverty
gap at
$2 a day
%
..
2.0
3.8
..
8.4
7.1
..
..
<0.5
36.3
<0.5
..
31.7
23.2
..
22.8
8.5
1.5
30.4
48.9
34.5
19.3
..
58.4
..
2.5
18.4
..
7.7
..
..
2.8
18.4
<0.5
..
<0.5
..
3.6
15.8
11.3
17.7
..
1.9
29.6
..
..
..
51.1
8.6
..
40.8
..
13.8
..
..
47.4
National poverty line
Population below the
poverty line
Survey
year
Honduras
Hungary
India
Indonesia
Iran, Islamic Rep.
Iraq
Ireland
Israel
Italy
Jamaica
Japan
Jordan
Kazakhstan
Kenya
Korea, Dem. Rep.
Korea, Rep.
Kuwait
Kyrgyz Republic
Lao PDR
Latvia
Lebanon
Lesotho
Liberia
Libya
Lithuania
Macedonia, FYR
Madagascar
Malawi
Malaysia
Mali
Mauritania
Mauritius
Mexico
Moldova
Mongolia
Morocco
Mozambique
Myanmar
Namibia
Nepal
Netherlands
New Zealand
Nicaragua
Niger
Nigeria
Norway
Oman
Pakistan
Panama
Papua New Guinea
Paraguay
Peru
Philippines
Poland
Portugal
Puerto Rico
Rural
%
Urban
%
1997 58.0
1993
..
1993–94 37.3
1996
..
..
..
..
..
..
1995 37.0
..
1991
..
1996 39.0
1994 47.0
..
..
..
2000 56.4
1993 48.7
..
..
..
..
..
..
..
1997 76.0
1990–91
..
1989
..
1998 75.9
1996 65.5
..
1996 52.4
2001 64.1
1995 33.1
1990–91 18.0
1996–97 71.3
..
..
1995–96 43.3
..
..
1993 76.1
1989–93 66.0
1985 49.5
..
..
1993 33.4
1997 64.9
1996 41.3
1991 28.5
1994 67.0
1994 53.1
1993
..
..
..
35.0
..
32.4
..
..
..
..
..
..
18.7
..
..
30.0
29.0
..
..
..
43.9
33.1
..
..
.. ..
..
..
..
63.2
..
..
30.1
30.1
..
26.5
58.0
38.5
7.6
62.0
..
..
21.6
..
..
31.9
52.0
31.7
..
..
17.2
15.3
16.1
19.7
46.1
28.0
..
..
..
International poverty line
Population below the
poverty line
National
%
Survey
year
47.0
1999
14.5
1997
36.0 1999–2000
15.7
1999
..
..
..
..
..
27.5
2000
..
15.0
1997
34.6
40.0
1997
..
..
..
52.0
2001
45.0
1997–98
..
..
.. ..
..
..
..
73.3
1999
54.0
1997–98
15.5
63.8
50.0
2000
..
37.1
2002
62.4
2002
36.3
1998
13.1
1998–99
69.4
..
..
41.8
2003–04
..
..
50.3
1998
63.0
43.0
1992–93
..
..
28.6
1998–99
37.3
37.5
21.8
53.5
1997
40.6
1997
23.8
..
..
2.7
people
Poverty
Rural
%
Urban
%
National
%
Survey
year
Population
below
$1 a day
%
58.0
..
30.2
34.4
..
..
..
..
..
25.1
..
..
..
53.0
..
..
..
51.0
41.0
..
..
..
..
..
..
..
76.7
66.5
..
..
61.2
..
34.8
67.2
32.6
27.2
..
..
..
34.6
..
..
68.5
..
36.4
..
..
35.9
..
..
..
64.7
50.7
..
..
..
37.0
..
24.7
16.1
..
..
..
..
..
12.8
..
..
..
49.0
..
..
..
41.2
26.9
..
..
..
..
..
..
..
52.1
54.9
..
..
25.4
..
11.4
42.6
39.4
12.0
..
..
..
9.6
..
..
30.5
..
30.4
..
..
24.2
..
..
..
40.4
21.5
..
..
..
48.0
17.3
28.6
27.1
..
..
..
..
..
18.7
..
11.7
..
52.0
..
..
..
47.6
38.6
..
..
..
..
..
..
..
71.3
65.3
..
..
46.3
..
20.3
48.5
35.6
19.0
..
..
..
30.9
..
..
47.9
..
34.1
..
..
32.6
..
..
..
49.0
36.8
..
..
..
1999 b
2002a
1999–2000a
2002a
1998a
2000a
2002–03a
2003a
1997a
1998 b
2003a
2002a
2003a
1995a
2003a
2003a
2001a
1997–98a
1997b
1994a
2000a
2002a
2001a
1998a
1999a
1996a
1993 b
2003–04a
2001a
1995a
2003a
2002a
2002b
2002b
2002b
2000a
2002a
1994b
20.7
<2
34.7
7.5
<2
..
..
..
..
<2
..
<2
<2
22.8
..
<2
..
<2
27.0
<2
..
36.4
..
..
<2
<2
61.0
41.7
<2
72.3
25.9
..
4.5
22.0
27.0
<2
37.9
..
34.9
24.1
..
..
45.1
60.6
70.8
..
..
17.0
6.5
..
16.4
12.5
15.5
<2
<2
..
Poverty
gap at
$1 a day
%
7.5
<0.5
8.2
0.9
<0.5
..
..
..
..
<0.5
..
<0.5
<.5
5.9
..
<0.5
..
<0.5
6.1
<0.5
..
19.0
..
..
<0.5
<0.5
27.9
14.8
<0.5
37.4
7.6
..
1.2
5.8
8.1
<0.5
12.0
..
14.0
5.4
..
..
16.7
34.0
34.5
..
..
3.1
2.3
..
7.4
4.4
3.0
<0.5
<0.5
..
Population
below
$2 a day
%
44.0
<2
79.9
52.4
7.3
..
..
..
..
13.3
..
7.0
16.0
58.3
..
<2
..
21.4
74.1
4.7
..
56.1
..
..
7.8
<2
85.1
76.1
9.3
90.6
63.1
..
20.4
63.7
74.9
14.3
78.4
..
55.8
68.5
..
..
79.9
85.8
92.4
..
..
73.6
17.1
..
33.2
31.8
47.5
<2
<2
..
2006 World Development Indicators
Poverty
gap at
$2 a day
%
20.2
<0.5
35.3
15.7
1.5
..
..
..
..
2.7
..
1.5
3.8
23.9
..
<0.5
..
4.4
30.2
1.2
..
33.1
..
..
1.8
<0.5
51.8
38.3
2.0
60.5
26.8
..
6.5
25.1
30.6
3.1
36.8
..
30.4
26.8
..
..
41.2
54.6
59.5
..
..
26.1
6.9
..
16.2
13.4
17.8
<0.5
<0.5
..
71
2.7
Poverty
National poverty line
Population below the
poverty line
Survey
year
Romania
Russian Federation
Rwanda
Saudi Arabia
Senegal
Serbia and Montenegro
Sierra Leone
Singapore
Slovak Republic
Slovenia
Somalia
South Africa
Spain
Sri Lanka
Sudan
Swaziland
Sweden
Switzerland
Syrian Arab Republic
Tajikistan
Tanzania
Thailand
Togo
Trinidad and Tobago
Tunisia
Turkey
Turkmenistan
Uganda
Ukraine
United Arab Emirates
United Kingdom
United States
Uruguay
Uzbekistan
Venezuela, RB
Vietnam
West Bank and Gaza
Yemen, Rep.
Zambia
Zimbabwe
1994
1994
1993
1992
1989
1990–91
1991
1990
1987–89
1992
1990
1994
1999–2000
2000
1994
2000
1989
1998
1998
1996
1990–91
Urban
%
National
%
27.9
..
..
..
40.4
..
..
..
..
..
..
..
..
22.0
..
..
..
..
..
..
40.8
..
..
20.0
13.1
..
..
37.4
34.9
..
..
..
..
30.5
..
45.5
..
45.0
82.8
35.8
20.4
..
..
..
23.7
..
..
..
..
..
..
..
..
15.0
..
..
..
..
..
..
31.2
..
..
24.0
3.5
..
..
9.6
21.5
30.9
51.2
..
33.4
..
82.8
..
..
..
..
..
..
20.0
..
..
..
..
..
..
38.6
18.0
32.3
21.0
7.4
28.3
..
33.8
31.5
..
..
..
..
27.5
31.3
37.4
..
41.8
69.2
25.8
a. Expenditure base. b. Income base.
72
Population below the
poverty line
Rural
%
2006 World Development Indicators
..
..
..
20.2
22.5
..
9.2
..
30.8
46.0
3.4
International poverty line
Survey
year
1999–2000
2003–04
1995–96
2000–01
1992
1995
2002
2002–03
2003
1998
2002
1998
1995–96
Rural
%
Urban
%
National
%
Survey
year
..
..
65.7
..
..
..
79.0
..
..
..
..
..
..
27.0
..
..
..
..
..
..
38.7
15.5
..
..
13.9
34.5
..
41.7
28.4
..
..
..
..
..
..
35.6
..
..
83.1
48.0
..
..
14.3
..
..
..
56.4
..
..
..
..
..
..
15.0
..
..
..
..
..
..
29.5
10.2
..
..
3.6
22.0
..
12.2
..
..
..
..
24.7
..
..
6.6
..
..
56.0
7.9
..
..
60.3
..
..
..
70.2
..
..
..
..
..
..
25.0
..
..
..
..
..
..
35.7
13.1
..
..
7.6
27.0
..
37.7
19.5
..
..
..
..
..
..
28.9
..
..
72.9
34.9
2003a
2002a
1999–2000a
1995a
1989a
1996b
1998a
2000a
2002a
2003a
2000–01a
2002a
1992b
2000a
2003a
2003 b
2003 b
2000 b
1998a
2002–03a
1995–96a
Population
below
$1 a day
%
<2
<2
51.7
..
22.3
..
57.0
..
<2
<2
..
10.7
..
5.6
..
..
..
..
..
7.4
57.8
<2
..
12.4
<2
3.4
..
..
<2
..
..
..
<2
..
8.3
..
..
15.7
75.8
56.1
Poverty
gap at
$1 a day
%
0.5
<0.5
20.0
..
5.7
..
39.5
..
<0.5
<0.5
..
1.7
..
0.8
..
..
..
..
..
1.3
20.7
<0.5
..
3.5
<0.5
0.8
..
..
<0.5
..
..
..
<0.5
..
2.8
..
..
4.5
36.4
24.2
Population
below
$2 a day
%
12.9
12.1
83.7
..
63.0
..
74.5
..
2.9
<2
..
34.1
..
41.6
..
..
..
..
..
42.8
89.9
25.2
..
39.0
6.6
18.7
..
..
4.9
..
..
..
5.7
..
27.6
..
..
45.2
94.1
83.0
Poverty
gap at
$2 a day
%
3.0
3.1
45.5
..
25.2
..
51.8
..
0.8
<0.5
..
12.6
..
11.9
..
..
..
..
..
13.0
49.3
6.2
..
14.6
1.3
5.7
..
..
0.9
..
..
..
1.6
..
10.2
..
..
15.0
62.2
48.2
2.7
people
Poverty
2.7a
Regional poverty estimates
Region
1981
1984
1987
1990
1993
1996
1999
2002a
People living on less than $1 a day (millions)
East Asia & Pacific
796
562
426
472
415
287
282
214
634
425
308
375
334
212
223
180
3
2
2
2
17
20
30
10
Latin America & Caribbean
36
46
45
49
52
52
54
47
Middle East & North Africa
9
8
7
6
4
5
8
5
475
460
473
462
476
461
429
437
China
Europe & Central Asia
South Asia
Sub-Saharan Africa
Total
164
198
219
227
242
271
294
303
1,482
1,277
1,171
1,218
1,208
1,097
1,096
1,015
848
852
863
844
873
886
873
835
57.7
38.9
28.0
29.6
24.9
16.6
15.7
11.6
63.8
41.0
28.5
33.0
28.4
17.4
17.8
14.0
Excluding China
Share of people living on less than $1 a day (%)
East Asia & Pacific
China
Europe & Central Asia
0.7
0.5
0.4
0.5
3.7
4.3
6.3
2.1
Latin America & Caribbean
9.7
11.8
10.9
11.3
11.3
10.7
10.5
8.9
Middle East & North Africa
5.1
3.8
3.2
2.3
1.6
2.0
2.6
1.6
South Asia
51.5
46.8
45.0
41.3
40.1
36.6
32.2
31.2
Sub-Saharan Africa
41.6
46.3
46.8
44.6
44.0
45.6
45.7
44.0
Total
40.4
32.8
28.4
27.9
26.3
22.8
21.8
19.4
31.7
29.8
28.4
26.1
25.6
24.6
23.1
21.1
1,170
1,109
1,028
1,116
1,079
922
900
748
Excluding China
People living on less than $2 a day (millions)
East Asia & Pacific
876
814
731
825
803
650
627
533
Europe & Central Asia
China
20
18
15
23
81
98
113
76
Latin America & Caribbean
99
119
115
125
136
117
127
123
Middle East & North Africa
52
50
53
51
52
61
70
61
821
859
911
958
1,005
1,029
1,039
1,091
South Asia
Sub-Saharan Africa
Total
Excluding China
288
326
355
382
410
447
489
516
2,450
2,480
2,478
2,654
2,764
2,674
2,739
2,614
1,574
1,666
1,747
1,829
1,961
2,024
2,111
2,082
Share of people living on less than $2 a day (%)
East Asia & Pacific
China
Europe & Central Asia
84.8
76.6
67.7
69.9
64.8
53.3
50.3
40.7
88.1
78.5
67.4
72.6
68.1
53.4
50.1
41.6
4.7
4.1
3.3
4.9
17.2
20.7
23.8
16.1
Latin America & Caribbean
26.9
30.4
27.8
28.4
29.5
24.1
25.1
23.4
Middle East & North Africa
28.9
25.2
24.2
21.4
20.2
22.3
24.3
19.8
South Asia
89.1
87.2
86.7
85.5
84.5
81.7
78.1
77.8
Sub-Saharan Africa
73.3
76.1
76.1
75.0
74.6
75.1
76.1
74.9
Total
66.7
63.7
60.1
60.8
60.2
55.5
54.4
50.0
58.8
58.4
57.5
56.6
57.4
56.3
55.8
52.7
Excluding China
Note: Estimates are computed based on population data from World Development Indicators 2005.
a. Preliminary estimates not strictly comparable with earlier estimates. See About the data for more information.
2006 World Development Indicators
73
2.7
Poverty
About the data
The World Bank produced its first global poverty
because of differences in timing or the quality and
when making comparisons over time. The commonly
estimates for developing countries for World Devel-
training of survey enumerators.
used $1 a day standard, measured in 1985 interna-
opment Report 1990 using household survey data
Comparisons of countries at different levels of
tional prices and adjusted to local currency using
for 22 countries (Ravallion, Datt, and van de Walle
development also pose a potential problem because
purchasing power parities (PPPs), was chosen for
1991). Incorporating survey data collected during the
of differences in the relative importance of consump-
the World Bank’s World Development Report 1990:
last 15 years, the database has expanded consid-
tion of nonmarket goods. The local market value of
Poverty because it is typical of the poverty lines in
erably and now includes 440 surveys representing
all consumption in kind (including own production,
low-income countries. PPP exchange rates, such as
almost 100 developing countries. Some 1.1 million
particularly important in underdeveloped rural econo-
those from the Penn World Tables or the World Bank,
randomly sampled households were interviewed in
mies) should be included in total consumption expen-
are used because they take into account the local
these surveys, representing 93 percent of the popu-
diture. Similarly, imputed profit from the production of
prices of goods and services not traded internation-
lation of developing countries. The surveys asked
nonmarket goods should be included in income. This
ally. But PPP rates were designed for comparing
detailed questions on sources of income and how it
is not always done, though such omissions were a far
aggregates from national accounts, not for making
was spent and on other household characteristics
bigger problem in surveys before the 1980s. Most
international poverty comparisons. As a result, there
such as the number of people sharing that income.
survey data now include valuations for consumption
is no certainty that an international poverty line mea-
Most interviewas were conducted by staff of govern-
or income from own production. Nonetheless, valu-
sures the same degree of need or deprivation across
ment statistics offices. Along with improvements in
ation methods vary. For example, some surveys use
countries.
data coverage and quality, the underlying methodol-
the price in the nearest market, while others use the
ogy has also improved, resulting in better and more
average farmgate selling price.
comprehensive estimates.
Early editions of World Development Indicators
used PPPs from the Penn World Tables. Recent edi-
Whenever possible, the table uses consumption
tions use 1993 consumption PPP estimates pro-
data for deciding who is poor and income surveys only
duced by the World Bank. Recalculated in 1993 PPP
Data availability
when consumption data are unavailable. In recent
terms, the original international poverty line of $1 a
Since 1979 there has been considerable expansion
editions there has been a change in how income
day in 1985 PPP terms is now about $1.08 a day.
in the number of countries that field such surveys,
surveys are used. In the past, average household
Any revisions in the PPP of a country to incorporate
the frequency of the surveys, and the quality of their
income was adjusted to accord with consumption
better price indexes can produce dramatically differ-
data. The number of data sets rose dramatically from
and income data from national accounts. But in test-
ent poverty lines in local currency.
a mere 13 between 1979 and 1981 to 100 between
ing this approach using data for some 20 countries
Issues also arise when comparing poverty mea-
1997 and 1999. The drop to 41 available surveys
for which income and consumption expenditure data
sures within countries. For example, the cost of living
after 1999 reflects the lag between the time data
were both available from the same surveys, income
is typically higher in urban than in rural areas. One
are collected and the time they become available
was found to yield a higher mean than consumption
reason is that food staples tend to be more expen-
for analysis, not a reduction in data collection. Data
but also higher inequality. When poverty measures
sive in urban areas. So the urban monetary poverty
coverage is improving in all regions, but Sub-Saharan
based on consumption and income were compared,
line should be higher than the rural poverty line. But it
Africa continues to lag, with only 28 of 48 countries
these two effects roughly cancelled each other out:
is not always clear that the difference between urban
having at least one data set available. A complete
statistically, there was no significant difference.
and rural poverty lines found in practice reflects only
overview of data availability by year and country
So recent editions use income data to estimate
differences in the cost of living. In some countries
can be obtained at http://iresearch.worldbank.org/
poverty directly, without adjusting average income
the urban poverty line in common use has a higher
povcalnet/.
measures.
real value—meaning that it allows the purchase of
Data quality
International poverty lines
the rural poverty line. Sometimes the difference
The problems of estimating poverty and comparing
International comparisons of poverty estimates
has been so large as to imply that the incidence of
poverty rates do not end with data availability. Sev-
entail both conceptual and practical problems.
poverty is greater in urban than in rural areas, even
eral other issues, some related to data quality, also
Countries have different definitions of poverty, and
though the reverse is found when adjustments are
arise in measuring household living standards from
consistent comparisons across countries can be
made only for differences in the cost of living. As with
survey data. One relates to the choice of income
difficult. Local poverty lines tend to have higher
international comparisons, when the real value of the
or consumption as a welfare indicator. Income is
purchasing power in rich countries, where more gen-
poverty line varies it is not clear how meaningful such
generally more difficult to measure accurately, and
erous standards are used, than in poor countries.
urban-rural comparisons are.
consumption comes closer to the notion of stan-
Is it reasonable to treat two people with the same
By combining all this information, a team in the
dard of living. And income can vary over time even
standard of living—in terms of their command over
World Bank’s Development Research Group cal-
if the standard of living does not. But consumption
commodities—differently because one happens to
culates the number of people living below various
data are not always available. Another issue is that
live in a better-off country?
international poverty lines, as well as other poverty
more commodities for consumption—than does
household surveys can differ widely, for example, in
Poverty measures based on an international
and inequality measures that are published in World
the number of consumer goods they identify. And
poverty line attempt to hold the real value of the
Development Indicators. The database is updated
even similar surveys may not be strictly comparable
poverty line constant across countries, as is done
annually as new survey data become available, and
74
2006 World Development Indicators
2.7
world view
Poverty
Definitions
a major reassessment of progress against poverty
Note on the 2002 estimates
• Survey year is the year in which the underlying data
is made about every three years.
The 2002 estimates are adapted from Global Eco-
were collected. • Rural poverty rate is the percent-
nomic Prospects 2006 (page 9, table 1.3). Note
age of the rural population living below the national
Do it yourself: PovcalNet
that a typesetting error occurred in the printed edi-
rural poverty line. • Urban poverty rate is the per-
Recently, this research team developed PovcalNet,
tion of Global Economic Prospects 2006; the 2002
centage of the urban population living below the
an interactive Web-based computational tool that
poverty rate estimates reported in table 2.7a are
national urban poverty line. • National poverty rate
allows users to replicate the calculations by the
the correct estimates.
is the percentage of the population living below the
World Bank’s researchers in estimating the extent
national poverty line. National estimates are based
of absolute poverty in the world. PovcalNet is self-
on population-weighted subgroup estimates from
contained and powered by reliable built-in software
household surveys. • Population below $1 a day
that performs the relevant calculations from a pri-
and population below $2 a day are the percentages
mary database. The underlying software can also
of the population living on less than $1.08 a day and
be downloaded from the site and used with distri-
$2.15 a day at 1993 international prices. As a result
butional data of various formats. The PovcalNet
of revisions in PPP exchange rates, poverty rates for
primary database consists of distributional data
individual countries cannot be compared with poverty
calculated directly from household survey data.
rates reported in earlier editions. • Poverty gap is
Detailed information for each of these is also avail-
the mean shortfall from the poverty line (counting
able from the site.
the nonpoor as having zero shortfall), expressed as a
Estimation from distributional data requires an
interpolation method. The method chosen was Lorenz
percentage of the poverty line. This measure reflects
the depth of poverty as well as its incidence.
curves with flexible functional forms, which have
proved reliable in past work. The Lorenz curve can
be graphed as the cumulative percentages of total
consumption or income against the cumulative number of people, starting with the poorest individual.
The empirical Lorenz curves estimated by PovcalNet
are weighted by household size, so they are based on
percentiles of population, not households.
PovcalNet also allows users to calculate poverty
measures under different assumptions. For example,
instead of $1 a day, users can specify a different
poverty line, say $1.50 or $3. Users can also specify different PPP rates and aggregate the estimates
using alternative country groupings (for example, UN
country groupings or groupings based on average
Data sources
incomes) or a selected set of individual countries.
The poverty measures are prepared by the World
PovcalNet is available online at http://iresearch.
Bank’s Development Research Group. The national
worldbank.org/povcalnet/.
poverty lines are based on the World Bank’s
country poverty assessments. The international
poverty lines are based on nationally representative primary household surveys conducted by
national statistical offices or by private agencies
under the supervision of government or international agencies and obtained from government
statistical offices and World Bank Group country
departments. The World Bank Group has prepared
an annual review of its poverty work since 1993.
For details on data sources and methods used in
deriving the World Bank’s latest estimates, see
Chen and Ravallion (2004), “How Have the World’s
Poorest Fared Since the Early 1980s?”
2006 World Development Indicators
75