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Unknown: The Extent, Distribution and Trend of Global Income Poverty

25 Pages Posted: 12 Oct 2006  

Thomas Pogge

Yale University, Global Justice Program

Sanjay G. Reddy

The New School - Department of Economics; Initiative for Policy Dialogue (IPD)

Date Written: 2006

Abstract

The estimates of the extent, distribution and trend of global income poverty provided in the World Bank's World Development Reports for 1990 and 2000/01 are neither meaningful nor reliable. The Bank uses an arbitrary international poverty line unrelated to any clear conception of what poverty is. It employs a misleading and inaccurate measure of purchasing power equivalence that vitiates international and inter-temporal comparisons of income poverty. It extrapolates incorrectly from limited data and thereby creates an appearance of precision that masks the high probable error of its estimates. The systematic distortion introduced by these three flaws likely leads to a large understatement of the extent of global income poverty and to an incorrect inference that it has declined. A new methodology of global poverty assessment is feasible and necessary.

Keywords: World Poverty, $1 per day, $2 per day, World Bank, PPPs, elementary human requirements

JEL Classification: I32, O10, O19

Suggested Citation

Pogge, Thomas and Reddy, Sanjay G., Unknown: The Extent, Distribution and Trend of Global Income Poverty (2006). Available at SSRN: https://ssrn.com/abstract=936772 or http://dx.doi.org/10.2139/ssrn.936772

Thomas Pogge

Yale University, Global Justice Program ( email )

New Haven, CT 06520
United States
2034322272 (Phone)

HOME PAGE: http://pantheon.yale.edu/~tp4

Sanjay G. Reddy (Contact Author)

The New School - Department of Economics ( email )

Room 1116
6 East 16th Street
New York, NY 10003
United States

Initiative for Policy Dialogue (IPD) ( email )

New York, NY
United States

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