World Bank's new poverty estimates / Martin Ravallion, Himanshu, Sanjay G. Reddy

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In 2005, one in three of the people in the world who consumed less than $ 1.25 a day (at 2005 purchasing power parity) lived in India – more than any other country. They accounted for about 40 per cent of India’s population. Twenty-five years earlier, 60 per cent of India’s population lived below the same real line. While this is clear progress, India’s long-term pace of poverty reduction by this measure is no more than average for the developing world, excluding China.
The World Bank’s recent estimates of poverty in the developing world have led to an upward revision of the number of poor in the world by 400 million. These adjustments are made on the basis of the revision in purchasing power parity estimates as part of the International Comparison Program exercise. Using the same ICP exercise, the Asian Development Bank claims an even higher estimate of the poor in Asia.
The “updated” estimates of global poverty by the World Bank do not address the basic problem with the past and current estimates, which is the lack of a clear criterion for identifying the poor. There is no basis to conclude that the new set of purchasing power parity rates employed to generate the new poverty estimates are closer to the “truth”. We can only conclude that they are differently distorted than the earlier ones.