Subsistence baskets as poverty lines: estimates of global, regional and country level poverty, 1950-2008

Typically the poverty estimates are derived using a dollarized poverty line. This method suffers from serious shortcomings introduced by the purchasing power parity (PPP) conversions. To avoid them we apply a subsistence basket with constant composition as a poverty line. This line is more sensitive to the price volatility in the consumption habits of the poor. It reveals different trends and levels, that are pronounced for Sub-Saharan Africa and Latin America. A comparison with the World Bank’s PovcalNet estimates for India, China, and Indonesia illustrates the underlying methodological differences further. On a global level, the strong declining trend of poverty that prevailed in the first half of the period we cover, has fainted to a slow decrease in the more recent years. Thus, the global poverty for 2008 is very similar to the one for 1990.