Welfare-Consistent Global Poverty Measures

53 Pages Posted: 28 Aug 2017

See all articles by Martin Ravallion

Martin Ravallion

Georgetown University

Shaohua Chen

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

Multiple version iconThere are 2 versions of this paper

Date Written: August 24, 2017

Abstract

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.

Keywords: Inequality

Suggested Citation

Ravallion, Martin and Chen, Shaohua, Welfare-Consistent Global Poverty Measures (August 24, 2017). World Bank Policy Research Working Paper No. 8170, Available at SSRN: https://ssrn.com/abstract=3025846

Martin Ravallion (Contact Author)

Georgetown University ( email )

Washington, DC 20057
United States

Shaohua Chen

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

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