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Assessing the Impact of the 2017 PPPs on the International Poverty Line and Global Poverty

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  • Jolliffe,Dean Mitchell
  • Mahler,Daniel Gerszon
  • Lakner,Christoph
  • Atamanov,Aziz
  • Tetteh Baah,Samuel Kofi

Abstract

Purchasing power parities (PPPs) are used to estimate the international poverty line (IPL) in acommon currency and account for relative price differences across countries when measuring global poverty. This paperassesses the impact of the 2017 PPPs on the nominal value of the IPL and global poverty. The analysis indicates thatupdating the $1.90 IPL in 2011 PPP dollars to 2017 PPP dollars results in an IPL of approximately $2.15—a findingthat is robust to various methods and assumptions. Based on an IPL of $2.15, the global extreme poverty rate in 2017falls from 9.3 to 9.1 percent, reducing the count of people who are poor by 16 million. This is a modest change comparedwith previous updates of PPP data. The paper also assesses the methodological stability between the 2011 and 2017 PPPs,scrutinizes large changes at the country level, and analyzes higher poverty lines with the 2017 PPPs.

Suggested Citation

  • Jolliffe,Dean Mitchell & Mahler,Daniel Gerszon & Lakner,Christoph & Atamanov,Aziz & Tetteh Baah,Samuel Kofi, 2022. "Assessing the Impact of the 2017 PPPs on the International Poverty Line and Global Poverty," Policy Research Working Paper Series 9941, The World Bank.
    • Handle: RePEc:wbk:wbrwps:9941
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    References listed on IDEAS

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    1. Angus Deaton & Paul Schreyer, 2022. "GDP, Wellbeing, and Health: Thoughts on the 2017 Round of the International Comparison Program," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(1), pages 1-15, March.
    2. Francisco H. G. Ferreira & Shaohua Chen & Andrew Dabalen & Yuri Dikhanov & Nada Hamadeh & Dean Jolliffe & Ambar Narayan & Espen Beer Prydz & Ana Revenga & Prem Sangraula & Umar Serajuddin & Nobuo Yosh, 2016. "A global count of the extreme poor in 2012: data issues, methodology and initial results," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 14(2), pages 141-172, June.
    3. Martin Ravallion, 2020. "Book review of Measuring Poverty around the World," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 18(1), pages 131-136, March.
    4. Robert Inklaar & D. S. Prasada Rao, 2017. "Cross-Country Income Levels over Time: Did the Developing World Suddenly Become Much Richer?," American Economic Journal: Macroeconomics, American Economic Association, vol. 9(1), pages 265-290, January.
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    6. Nanak Kakwani & Hyun H. Son, 2016. "Global poverty estimates based on 2011 purchasing power parity: where should the new poverty line be drawn?," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 14(2), pages 173-184, June.
    7. Angus Deaton & Bettina Aten, 2017. "Trying to Understand the PPPs in ICP 2011: Why Are the Results So Different?," American Economic Journal: Macroeconomics, American Economic Association, vol. 9(1), pages 243-264, January.
    8. Robert C. Allen, 2017. "Absolute Poverty: When Necessity Displaces Desire," American Economic Review, American Economic Association, vol. 107(12), pages 3690-3721, December.
    9. Aziz Atamanov & Christoph Lakner & Daniel Gerszon Mahler & Samuel Kofi Tetteh Baah & Judy Yang, 2020. "The Effect of New PPP Estimates on Global Poverty: A First Look," Global Poverty Monitoring Technical Note Series 12, The World Bank.
    10. Nanak Kakwani & Hyun H. Son, 2016. "Global poverty estimates based on 2011 purchasing power parity: where should the new poverty line be drawn?," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 14(2), pages 173-184, June.
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    12. H. Krijnse Locker & H. D. Faerber, 1984. "Space And Time Comparisons Of Purchasing Power Parities And Real Values," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 30(1), pages 53-83, March.
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    Cited by:

    1. Jolliffe, Dean & Baah, Samuel Kofi Tetteh, 2024. "Identifying the poor – Accounting for household economies of scale in global poverty estimates," World Development, Elsevier, vol. 179(C).
    2. Ngoc Duc Lang & Ha Mai Tran & Giang Tra Nguyen & Duc Hong Vo, 2024. "An Untapped Instrument in the Fight Against Poverty: The Impacts of Financial Literacy on Poverty Worldwide," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 174(2), pages 657-695, September.
    3. Mahler,Daniel Gerszon & Yonzan,Nishant & Lakner,Christoph, 2022. "The Impact of COVID-19 on Global Inequality and Poverty," Policy Research Working Paper Series 10198, The World Bank.
    4. Dean, James & Geloso, Vincent, 2024. "Poverty spells and economic freedom: Canadian evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 224(C), pages 282-296.

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