Poverty-Specific Purchasing Power Parities in Africa

23 Pages Posted: 24 Jul 2017

Date Written: July 18, 2017

Abstract

The paper revisits the issue of poverty-specific purchasing power parities (PPPs), using the most recent (2011) International Comparison Program (ICP) results. The World Bank's global poverty count uses a common international poverty line -- currently $1.90 at 2011 international prices-based on the ICP PPPs for consumption. The use of these PPPs is often criticized for two reasons. First, the ICP PPPs are based on patterns of aggregate household consumption, not the consumption of the poor. Second, the basket of goods and services used for collecting prices for the ICP is not poverty specific. On the first issue, using data from 28 African countries, the paper concludes that the poverty-specific PPPs estimated with household expenditure survey weights are very similar to the ICP PPPs. On the second issue, poverty-specific PPPs were estimated after removing items deemed to be irrelevant for the poor. The overall effect of removing these items from consumption PPPs is shown to be negligible.

Keywords: Poverty Lines, Poverty Diagnostics, Poverty Monitoring & Analysis, Poverty Impact Evaluation, Small Area Estimation Poverty Mapping, Poverty Assessment

Suggested Citation

Dikhanov, Yuri and Hamadeh, Nada and Vigil-Oliver, William and Degefu, Tefera Bekele and Song, Inyoung, Poverty-Specific Purchasing Power Parities in Africa (July 18, 2017). World Bank Policy Research Working Paper No. 8150, Available at SSRN: https://ssrn.com/abstract=3006224

Yuri Dikhanov (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Nada Hamadeh

World Bank

1818 H Street, NW
Washington, DC 20433
United States

William Vigil-Oliver

The World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Tefera Bekele Degefu

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Inyoung Song

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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