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Purchasing power parity exchange rates for the global poor

Author

Listed:
  • 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.

Suggested Citation

  • Angus Deaton & Olivier Dupriez, 2009. "Purchasing power parity exchange rates for the global poor," Working Papers 1187, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
  • Handle: RePEc:pri:rpdevs:purchasing_power_parity_exchange_rates_for_global_poor_nov11.pdf
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    References listed on IDEAS

    as
    1. Angus Deaton, 2005. "Measuring Poverty in a Growing World (or Measuring Growth in a Poor World)," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 1-19, February.
    2. 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, Oxford University Press, vol. 125(4), pages 1577-1625.
    3. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762.
    4. Robert Summers, 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.
    5. Diewert, Erwin, 2008. "New Methodology for Linking the Regions," Economics working papers erwin_diewert-2008-9, Vancouver School of Economics, revised 09 Sep 2008.
    6. Angus Deaton & Alan Heston, 2010. "Understanding PPPs and PPP-Based National Accounts," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(4), pages 1-35, October.
    7. repec:pri:rpdevs:presidential%20address%2017january%202010%20all is not listed on IDEAS
    8. repec:pri:rpdevs:deaton_price_indexes_inequality_and_the_measurement_of_world_poverty_aer. is not listed on IDEAS
    9. D. S. Prasada Rao, 2005. "On The Equivalence Of Weighted Country‐Product‐Dummy (Cpd) Method And The Rao‐System For Multilateral Price Comparisons," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 51(4), pages 571-580, December.
    10. 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.
    11. Angus Deaton, 2010. "Price Indexes, Inequality, and the Measurement of World Poverty," American Economic Review, American Economic Association, vol. 100(1), pages 5-34, March.
    12. repec:pri:rpdevs:presidential%20address%2017january%202010%20all.pdf is not listed on IDEAS
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    purchasing power parities; health policy; International Comparison Program; poverty;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications

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