Measuring Poverty

Although we have more data than ever before at our disposal, measuring poverty remains a controversial issue. This paper discusses the ambiguity that arises from using different definitions and data sources in world poverty measurement. It opens with a critical review of the different procedures to establish poverty lines and the various measures of poverty level, including the headcount ratio, poverty gap and capabilities approach. It then goes on to examine the issues involved in measuring world poverty, with reference both to the difficulty of comparing poverty between different countries and the use of representative household surveys versus national accounts for poverty measurement. Although significant differences exist, the general evidence shows that, apart from India and China, poverty in the world is getting worse; but it is also true that nearly half of the world’s population live in places where poverty levels are falling.