More relatively-poor people in a less absolutely-poor world, Vol. 1 of 1

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More relatively-poor people in a less absolutely-poor world

Author:	Chen, Shaohua; Ravallion, Martin;	Collection Title:	Policy Research working paper ; no. WPS 6114Paper is funded by the Knowledge for Change Program (KCP)
Country:	World;	Date Stored:	2012/07/02
Document Date:	2012/07/01	Document Type:	Policy Research Working Paper
Language:	English	Major Sector:	Public Administration, Law, and Justice; Health and other social services
Rel. Proj ID:	1W-Global Poverty Estimates -- -- P115721;	Region:	The World Region
Report Number:	WPS6114	Sub Sectors:	Other social services; Law and justice
SubTopics:	Regional Economic Development; Achieving Shared Growth; Rural Poverty Reduction; Services & Transfers to Poor	Volume No:	1 of 1

Summary: Relative deprivation, shame and social exclusion can matter to the welfare of people everywhere. The authors argue that such social effects on welfare call for a reconsideration of how we assess global poverty, but they do not support standard measures of relative poverty. The paper argues instead for using a weakly-relative measure as the upper-bound complement to the lower-bound provided by a standard absolute measure. New estimates of global poverty are presented, drawing on 850 household surveys spanning 125 countries over 1981-2008. The absolute line is $1.25 a day at 2005 prices, while the relative line rises with the mean, at a gradient of 1:2 above $1.25 a day. The authors show that these parameter choices are consistent with cross-country data on national poverty lines. The results indicate that the incidence of both absolute and weakly-relative poverty in the developing world has been falling since the 1990s, but more slowly for the relative measure. While the number of absolutely poor has fallen, the number of relatively poor has changed little since the 1990s, and is higher in 2008 than 1981.


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