Has world poverty really fallen?

The short answer is: maybe, maybe not. Here's a slightly longer answer:

We evaluate the claim that world consumption poverty has fallen since 1990 in light of alternative assumptions about the extent of initial poverty and the rate of subsequent poverty reduction in China, India, and the rest of the developing world. We use two poverty indicators: the aggregate headcount and the headcount ratio, and consider two widely-used international poverty lines ($1/day and $2/day).

We conclude that, because of uncertainties in relation to the extent and trend of poverty in China, India, and the rest of the developing world, global poverty may or may not have increased. The extent of the estimated increase or decrease in world poverty is critically dependent on the assumptions made. Our conclusions highlight the importance of improving the quality of global poverty statistics.

That comes from an article of the same title by Barnard College's Sanjay Reddy and Columbia University's Camelia Miniou in the latest issue of the Review of Income and Wealth (Vol. 53, No. 3). For now at least, it is available to download free.

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