Quantifying the magnitude and severity of absolute poverty in the developing world in the mid-1980s

In counting the poor, and measuring the severity of absolute poverty, one faces a number of difficult questions. What poverty line should be used? Should one use the same poverty line across all countries? How should one adjust for differences across countries in the purchasing power of their currencies at official exchange rates? This paper proposes a methodology for addressing these questions and others, and gives aggregate results for 86 developing countries in the mid-1980s. The paper aims to make a necessarily rough but methodologically consistent assessment ofthe magnitude and severity of absolute poverty, based on recent available data. It suggests three possible interpretations of an"absolute poverty line"which might be considered appropriate for this purpose. It is followed by an empirical examination of poverty lines for a number of countries, both developing and developed. It discusses issues which arise in measuring poverty from readily available data on income distribution and outlines the approach used to measure poverty in countries for which such data are not available. The paper presents and discusses estimates of the prevalence and severity of absolute poverty in the developing countries in the mid-1980s. It also discusses some of the implications of these results, particularly their bearing on the prospects for future poverty alleviation.