Societal Poverty: A Relative and Relevant Measure

48 Pages Posted: 13 Jun 2017 Last revised: 21 May 2020

See all articles by Dean Jolliffe

Dean Jolliffe

World Bank, DECDG; IZA Institute of Labor Economics; Global Labor Organization (GLO); Johns Hopkins University, Paul H. Nitze School of Advanced International Studies (SAIS), Students

Espen Beer Prydz

World Bank - Development Research Group (DECRG)

Date Written: May 23, 2017

Abstract

Poverty lines are typically higher in richer countries, and lower in poorer ones, reflecting the relative nature of national assessments of who is considered poor. In many high-income countries, poverty lines are explicitly relative, set as a share of mean or median income. Despite systematic variation in how countries define poverty, global poverty counts are based on fixed-value lines. To reflect national assessments of poverty in a global headcount of poverty, this paper proposes a societal poverty line. The proposed societal poverty line is derived from 699 harmonized national poverty lines, and has an intercept of $1 per day and a relative gradient of 50 percent of median national income or consumption. The societal poverty line is more closely aligned with national definitions of poverty than other proposed relative lines.By this relative measure, societal poverty has fallen steadily since 1990, but at a much slower pace than absolute extreme poverty.

Keywords: Inequality, Inflation, Poverty Lines, Poverty Monitoring & Analysis, Poverty Impact Evaluation, Poverty Diagnostics, Small Area Estimation Poverty Mapping, Poverty Assessment, Economic Growth, Industrial Economics, Economic Theory & Research, Social Assessment, Environmental Protection

Suggested Citation

Jolliffe, Dean and Prydz, Espen Beer, Societal Poverty: A Relative and Relevant Measure (May 23, 2017). World Bank Policy Research Working Paper No. 8073, Available at SSRN: https://ssrn.com/abstract=2985498

Dean Jolliffe (Contact Author)

World Bank, DECDG ( email )

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Espen Beer Prydz

World Bank - Development Research Group (DECRG) ( email )

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Washington, DC 20433
United States

HOME PAGE: http://www.worldbank.org/en/about/people/espen-beer-prydz

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