POVERTY-SPECIFIC PURCHASING POWER PARITIES (PPPs) IN AFRICA commentary, which in turn has prompted research on the role of PPPs in methods to measure global poverty.

Deaton and Dupriez (2011) were one of the first to study the effect of estimating global poverty using poverty-specific PPPs. Using 2005 ICP data, they found that consumption PPPs reweighted to a poverty basis are quite similar to the regular 2005 ICP consumption PPPs that use weights from national accounts. They note that weighting differences are probably not of great importance for estimating global poverty counts. To reach this conclusion, they used household expenditure surveys from 62 poor countries around the world to reweight the 2005 ICP consumption PPPs and produce a set of poverty-weighted PPPs. These PPPs were then used to calculate new IPLs and global poverty counts according to various definitions.

Similar research at the regional level was conducted by the Asian Development Bank (ADB). The Asian Development Bank (2008) used price data for 16 Asian countries to compile a set of povertyspecific PPPs. To that end, a separate price collection, using modified items from the 2005 ICP, was organized in 2006. The study examined whether data collected on prices for the items that were considered typical of the consumption patterns of the poor would produce significantly different poverty PPPs. This research concluded that indeed PPPs could change more substantially when using items consumed by the poor and poverty-specific weights; however, it is difficult to compare its results directly to the 2005 ICP because of differences in methodology, timing and geographical scope (number of countries). In particular, because of inclusion of more items with loose specifications, comparability of items across countries could be more problematic in the ADB’s study than in the 2005 ICP.

# **3.** **_Source Data_**

## _3.1 ICP and CPI data_

Throughout, we make extensive use of 2011 ICP data, classifications and concepts. Our interest though is on PPPs for consumption, so we only work with basic headings belonging to the consumption component of GDP.

In section 4 we focus on the reweighted consumption PPPs. The reweighting process was done at the basic heading level and we worked with 108 of the 110 basic headings for household consumption. Our calculations exclude two basic headings that are outside the scope of most household expenditure surveys, namely those corresponding to expenditures in the domestic market by non-resident households and expenditures of resident households when traveling abroad.

In addition to ICP data, computations in section 4 also required data on consumer price indexes (CPIs) of individual countries.<sup>7</sup> CPIs for general consumption were used to deflate the local currency value of the IPL to prices prevalent in the year each household expenditure survey was conducted. This was necessary when calculating poverty-specific PPPs that required identifying households below or around the IPL. All CPI series used were sourced from ICP regional implementing agencies, the IMF Statistics Department, and, to a lesser extent, the World Bank World Development Indicators (WDI).

In Section 5 we turn to the item level. Computations in this section relied on item-level price data and related metadata from the 2011 ICP Africa exercise, which included 50 countries. Unlike in section 4, we used information from all 110 basic headings for household consumption when possible, even if the two basic headings excluded in section 4 contain no item-level information.

## _3.2 Standardized household expenditure survey data_

Our reweighting of consumption PPPs required switching regular ICP national accounts sourced expenditures with those from household expenditure surveys. In particular, we used expenditures from a set of standardized data sets derived from existing household expenditure survey data files. Table 1 lists the survey title and year of the household expenditure surveys underlying each of the 28 standardized data

> 7 CPIs measure the average change over time in the prices of consumer goods and services purchased for consumption by a reference population .

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