Paris School of Economics - L'Agence Française de Développement

Countries
10 reference countries 1993
Bangladesh 1.03 1.41 1.46
China 0.85 2.32 1.98
India 0.90 1.41 1.27
Indonesia 1.07 2.13 2.28
Nepal * 0.87 1.96 1.70
Pakistan 1.67 1.47 2.45
Tanzania* 0.63 1.49 0.94
Thailand 1.89 1.15 2.18
Tunisia 1.35 1.81 2.46
Zambia 1.30 1.20 1.57
Mean 1.16 (1.20) 1.64 1.83
Median 1.05 (0.97) 1.48 1.84 (0.93)
Source: author’s calculations.
Poverty line
2005 international $
The final column shows these old and new
poverty lines converted at PPPs for 2005, but
now using the PPPs for 2005 based on the
updated results of ICP 1993. This helps us to
isolate the effect of changing the reference
countries from the effect of moving to the new
ICP. Comparing the first and third columns,
we can see that the ratio of the two lines,
which using ICP 2005 was 1.08 for the mean
and 1.21 for the median, would have been 1.19
for the mean and 1.23 for the median using
1993 based PPPs. The gap between the counts
based on the “new” countries poverty line and
the “old” countries poverty line would have
been much larger had the revision to the ICP
not taken place, or not been incorporated into
the poverty estimates (note that the average
Ratio of 2005 PPP
to 1993 PPP for 2005
Hypothetical current
PL in 1993 $
Notes: Column 1 is per capita consumption per day in 2005 international dollars, taken from RCS (2010). Column 2 is ratio of 2005 PPP
for consumption in 2005 international dollars to 1993 dollars. Column 3 is column 1 multiplied by column 2. The numbers in brackets after
the means and medians are the numbers of global poor, in billions. Starred countries appear in both lists.
of the 1993 based poverty lines for the “old”
countries is much higher than the old $1.08
line. This is in part because of US inflation
between 1993 and 2005 — about 35 percent —
but also because the poverty lines have themselves
been updated since the $1.08 was set).
The new global poverty count is higher than
the old poverty count, in part because of the
change in the structure of PPPs, but also
because the group of countries was changed,
dropping those with low poverty lines, and
including new ones with high poverty lines. It
should also be noted that the 15 new countries
have an average population of only 19.9
million in 2005, compared with an average
population of 307.7 million in the 10 old countries.
The global poverty counts are dominated
December 2011 / Measure for Measure / How Well Do We Measure Development? / © AFD [ 31 ]