HAS WORLD POVERTY REALLY FALLEN?

Authors


  • Note: We would like to thank the Bureau of Development Policy and the International Poverty Center of the United Nations Development Program, for providing valuable support for this research. We are very grateful to Terry McKinley for facilitating this support. We would like to thank Gaurav Datt for his assistance with a query, Tanweer Akram, and seminar participants at UNU-WIDER and Columbia University for helpful suggestions. We also thank two anonymous referees of this journal for their useful comments.

*Sanjay G. Reddy, Department of Economics, Barnard College, Columbia University, 3009 Broadway, New York, NY 10027, USA (sr793@columbia.edu).

Abstract

We evaluate the claim that world consumption poverty has fallen since 1990 in light of alternative assumptions about the extent of initial poverty and the rate of subsequent poverty reduction in China, India, and the rest of the developing world. We use two poverty indicators: the aggregate headcount and the headcount ratio, and consider two widely-used international poverty lines ($1/day and $2/day). We conclude that, because of uncertainties in relation to the extent and trend of poverty in China, India, and the rest of the developing world, global poverty may or may not have increased. The extent of the estimated increase or decrease in world poverty is critically dependent on the assumptions made. Our conclusions highlight the importance of improving the quality of global poverty statistics.

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