Morten Jerven Morten Jerven

Statistical Earthquakes

That’s what Homi Kharas and Laurence Chandy calls it. They refer to the shifts that the new price data come from the International Comparison Program are causing to the poverty numbers. The new numbers are causing large revisions upwards and downwards for some country, but mostly upwards. Among other things the revision underscores that according to the same authors in a different post:

Global poverty estimates are subject to large error.

In  that post they also note that

Every country in the world has a poverty line—a standard of living below which its citizens are considered poor.

Yes, that is kind of true. But not every country has a well measured poverty line. Not every country has had a household budget survey (for the most complete list). This earthquake is caused by a change in the data used for global comparisons, and there are still big blind-spots on the national level.

This statistical earthquake is still less ground-shaking than the previous round, when the 2005 data caused a large increase in poverty, as discussed by Angus Deaton here.

Andy Norton notes that “Poverty numbers are a construct” and that

We should remember that the global poverty line is just that – it should not take over at the national level from a process of defining the meaning of poverty that ought to reflect national values and a process of national debate.

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