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Poverty

Friday Roundup: Agricultural Productivity & Poverty Reduction in Bangladesh, International Day for the Eradication of Poverty, A conversation with Yang Lan on Ending Extreme Poverty, Measuring Poverty, and Universal Health

LTD Editors's picture

A new working paper by Shahe Emran and Forhad Shilpi looks at the impact of increased agricultural productivity (e.g. through increased rainfall) on hired labor, wages and poverty. The paper finds a positive response of labor hours devoted to market activities as opposed to home production. Evidence also indicates that a positive rainfall shock increases per capita consumption significantly, thus implying that agricultural productivity increase played an important role in poverty reduction achieved in the last two decades in rural Bangladesh.

Today is the International Day for the Eradication of Poverty, and the theme for this year is 'Leave no one behind: think, decide and act together against extreme poverty.' Learn more, and follow on Twitter #endpoverty.

Poverty measurement and PPPs: The World Bank explains

LTD Editors's picture

As the editors of Let's Talk Development, we want to respond to questions raised recently in social media channels about use of 2011 International Comparison Program (ICP) as well as during events and discussions about poverty and measurements during the Annual Meetings of the World Bank and IMF last week.

The World Bank currently uses an international poverty line of $1.25 (per person per day) in 2005 prices to monitor global poverty. The process draws on several data sources, including the ICP. The most recent  global and regional poverty estimates cover the period 1981-2011 and are available from the recently updated Povcalnet database; they are based on data from well over 1,000 household surveys, covering nearly all developing countries. The latest estimates have been published and  explained in both the recent Policy Research Report and the Global Monitoring Report, published last week.

Parsing the challenges of measuring poverty and shared prosperity

Peter Lanjouw's picture

The data and processes needed to measure global poverty and gauge improvements in the prosperity of the bottom 40% of people in each country present complex challenges and provoke considerable debate amongst poverty experts.  

From the comparability of household surveys and their use in policy design to the utility of purchasing power parity data as a unifying standard for measuring the poor, the devil in global poverty analysis is in the details. It’s also vital to understand the World Bank’s recently adopted twin goals in a broader context, to see how they fit into a broader array of monitorable indicators that each come with their own specific features and insights. We must also listen to client governments and outside partners when they prefer to go beyond income to look at multidimensional social welfare functions.

From Jordan to Liberia: Imputing, modeling and measurement in a world of imperfect data

Kristen Himelein's picture

Simply stated, we never have enough data. This is true from smallest low income countries in Africa to the largest more complex economy in the West.  And the need grows continuously as interconnected world markets and leapfrogging technologies smash through any remaining notions of a standard path to prosperity. For many countries in the developing world, the unfortunate paradox is that they have the greatest needs but the fewest resources, both financial and in terms of capacity.  In this setting, researchers in statistics and economics have been developing new techniques to expand the usefulness of limited data. The broad body of work is collected under the umbrella “survey-to-survey imputation” and includes two recently-published papers in the World Bank Policy Research Working Paper series, “Updating Poverty Estimates at Frequent Intervals in the Absence of Consumption Data: Methods and Illustration with Reference to a Middle-Income Country,” by Hai-Anh Dang, Peter Lanjouw, and Umar Serajuddin, and “Estimating Poverty in the Absence of Consumption Data: The Case of Liberia,” by Andrew Dabalen, Errol Graham, Kristen Himelein, and Rose Mungai. (Fortunately the authors are much more creative in their approach to analysis than in their approach to naming papers.) 

Updating poverty estimates at frequent intervals in the absence of consumption data

LTD Editors's picture

Obtaining consistent estimates on poverty over time as well as monitoring poverty trends on a timely basis is a priority concern for policy makers. However, these objectives are not readily achieved in practice when household consumption data are neither frequently collected, nor constructed using consistent and transparent criteria.

Roles of Development Aid in a Globalized World

Yumeka Hirano's picture

In the context of development, globalization has always had two facets. For the advocates of globalization, it has facilitated financial and economic integration around the world and has played a substantial role in reducing poverty in many developing countries. For those who oppose it, it has introduced new challenges such as economic structural changes, huge income inequality and development disparities across and within developing countries. The changing development landscape with globalization calls for the necessity of reconsidering effective development aid strategies.

Aid is Good for the Poor

Yumeka Hirano's picture

Enhancing the effectiveness of aid has long been the international development community’s core agenda, given the limited resources available for the fight against poverty. With the establishment of the Millennium Development Goals (MDGs) in 2000 and the implementation of the Paris Declaration (PD) on Aid Effectiveness in 2005, the international community has continued to improve the impact of aid on development. However, poverty still persists despite drastic changes in the development landscape.  

Making Development Edutaining

Swati Mishra's picture

Development is not easy; making it sustainable, even more difficult. Take for example road traffic rules. We can build better roads and install traffic lights, but cannot guarantee adherence to traffic rules. Even with laws in place, people may be more willing to pay fines than stop at a red light or wear seat belts. How do you make people value their own lives or their betterment? To succeed, we have to motivate people rather than just educate them.

Welfare dynamics measurement: Two definitions of a vulnerability line and their empirical application

LTD Editors's picture

Little research currently exists on a vulnerability line that distinguishes the poor population from the population that is not poor but that still faces significant risk of falling back into poverty. A new World Bank policy research working paper by Hai-Anh H. Dang and Peter F. Lanjouw attempts to fill this gap by proposing vulnerability lines that can be straightforwardly estimated with panel or cross-sectional household survey data, in rich- and poor-country settings. These vulnerability lines offer a means to broaden traditional poverty analysis and can also assist with the identification of the middle class or resilient population groups. Empirical illustrations are provided using panel data from the United States (Panel Study of Income Dynamics) and Vietnam (Vietnam Household Living Standards Survey) for the period 2004-2008 and cross-sectional data from India (National Sample Survey) for the period 2004-2009. The estimation results indicate that in Vietnam and India during this time period, the population living in poverty and the middle class have been falling and expanding, respectively, while the opposite has been occurring in the United States.

PPPs and Global Poverty: July 9 Seminar at 12:30 PM, Join Online!

LTD Editors's picture

The Purchasing Power Parity (PPP) rates released in April 2014, based on the 2011 round of the International Comparison Program (ICP), entail some seemingly dramatic revisions to price levels and real incomes across the world. Looking back over the last three ICP rounds, back to 1993, it feels like we have been on an “ICP roller coaster” with falls in the estimated real incomes of many developing countries up to 2005 and then rises in 2011. The 2011 revisions have been taken to suggest substantially less poverty and inequality in the world than the 2005 round had implied. If we believe these new PPPs then the economic map of the world is quite different to what we thought. But can they be believed? A public debate has been generated by the new PPPs.

On July 9, 2014 Martin Ravallion (Department of Economics, Georgetown University) will shed more light on this ongoing debate at the Poverty and Applied Macro seminar hosted by the World Bank's research department.

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