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Purchasing power parity exchange rates for the global poor

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  • Angus Deaton

    (Princeton University)

  • Olivier Dupriez

    (World Bank)

Abstract

The first of the Millennium Development Goals targets global poverty. The numbers that support this goal are estimated by the World Bank, and come from a worldwide count of people who live below a common international poverty line. This line, loosely referred to as the dollar-a-day line, is calculated as an average over the world’s poorest countries of their national poverty lines expressed in international dollars. The counts of those living below the line come from household surveys, the number and coverage of which have steadily increased over the years. National poverty lines are converted to international currency using the purchasing power parity (PPP) exchange rates from the various rounds of the International Comparison Program (ICP). These PPPs, unlike market exchange rates, are constructed as price indexes that compare the level of consumer prices across countries.

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Bibliographic Info

Paper provided by Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies. in its series Working Papers with number 1187.

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Date of creation: Nov 2009
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Handle: RePEc:pri:rpdevs:purchasing_power_parity_exchange_rates_for_global_poor_nov11

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Keywords: purchasing power parities; health policy; International Comparison Program; poverty;

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References

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  1. Angus Deaton & Alan Heston, 2009. "Understanding PPPs and PPP-based national accounts," Working Papers 1186, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
  2. Angus Deaton, 2010. "Price indexes, inequality, and the measurement of world poverty," Working Papers 1207, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
  3. Summers, Robert, 1973. "International Price Comparisons Based Upon Incomplete Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 19(1), pages 1-16, March.
  4. Diewert, W. E., 1976. "Exact and superlative index numbers," Journal of Econometrics, Elsevier, vol. 4(2), pages 115-145, May.
  5. Angus Deaton, 2004. "Measuring poverty in a growing world (or measuring growth in a poor world)," Working Papers 178, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
  6. Angus Deaton, 2005. "ERRATUM: Measuring Poverty in a Growing World (or Measuring Growth in a Poor World)," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 395-395, May.
  7. Shaohua Chen & Martin Ravallion, 2010. "The Developing World Is Poorer Than We Thought, but No Less Successful in the Fight Against Poverty," The Quarterly Journal of Economics, MIT Press, vol. 125(4), pages 1577-1625, November.
  8. Diewert, Erwin, 2008. "New Methodology for Linking the Regions," Economics working papers erwin_diewert-2008-9, Vancouver School of Economics, revised 09 Sep 2008.
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Citations

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Cited by:
  1. Almås, Ingvild & Sørensen, Erik Ø., 2012. "Global Income Inequality and Cost-of-Living Adjustment: The Geary–Allen World Accounts," Discussion Paper Series in Economics 20/2012, Department of Economics, Norwegian School of Economics.
  2. Shepherd, Andrew & Bishop, Sylvia, 2013. "Aid and poverty: Why does aid not address poverty (much)?," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  3. Dhongde, Shatakshee & Minoiu, Camelia, 2013. "Global Poverty Estimates: A Sensitivity Analysis," World Development, Elsevier, vol. 44(C), pages 1-13.
  4. Facundo Alvaredo & Leonardo Gasparini, 2013. "Recent Trends in Inequality and Poverty in Developing Countries," CEDLAS, Working Papers 0151, CEDLAS, Universidad Nacional de La Plata.
  5. Sarah Dykstra, Benjamin Dykstra, and Justin Sandefur, 2014. "We Just Ran Twenty-Three Million Queries of the World Bank's Website - Working Paper 362," Working Papers 362, Center for Global Development.
  6. Lakner, Christoph & Milanovic, Branko, 2013. "Global income distribution : from the fall of the Berlin Wall to the great recession," Policy Research Working Paper Series 6719, The World Bank.
  7. Headey, Derek D. & Ecker, Olivier, 2012. "Improving the measurement of food security:," IFPRI discussion papers 1225, International Food Policy Research Institute (IFPRI).

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