**Table 11: Identifying the $3.20 poor based on covariates of poverty**

_<u>(Pooled data across countries with each country weighted by millions of poor)</u>_

|**Category**<br>**(1)**|**Per capita**<br>**poor only**<br>**(2)**|**Root N**<br>**poor only**<br>**(3)**|**Diff.**<br>**p-value**<br>**(4)**|**Per capita**<br>**poor**<br>**(5)**|**Root N**<br>**poor**<br>**(6)**|**Diff.**<br>**p-value**<br>**(7)**|**Obs**<br>**(8)**|
|---|---|---|---|---|---|---|---|
|Years of schooling|0.021***|-0.088***|0|-0.462***|-0.571***|0|683,533|
|Asset index|-0.005*|0.038***|0|-0.802***|-0.759***|0|431,436|
|Asset ownership|-0.021***|-0.085***|0|-0.284***|-0.347***|0|264,680|
|Literacy|0.003|-0.011***|0.0014|-0.238***|-0.252***|0.0014|694,463|
|Not employed in the<br>agricultural sector|-0.004|-0.040***|0.0002|-0.158***|-0.194***|0.0002|450,521|
|Access to electricity|0.017***|0.021***|0.4559|-0.316***|-0.311***|0.4559|697,574|
|Piped drinking<br>water|0.002|0.013**|0.0929|-0.132***|-0.122***|0.0929|595,934|
|Improved sanitation|0.003|-0.022***|0|-0.220***|-0.245***|0|592,937|

<u>Source: Authors’ calculations from the Global Monitoring Database (GMD)</u> <u>Notes: This table shows the results of regressing an indicator variable of being poor on (ranked) residuals of covariates</u> of poverty (see Section 3b in the paper for more details). The residuals are determined by conditioning out household size from the covariates of poverty, including years of schooling, asset ownership/index, literacy, access to electricity, etc. Ranked residuals are used for only the first two covariates, years of schooling and asset index, which are continuous variables by construction. The remaining covariates are binary variables (e.g., literacy, ownership of a computer, etc.). With limited asset categories (e.g., only three assets for Colombia, Mali, and Pakistan), it makes more sense to create a binary variable than an asset index. The regressions are based on all countries with data for each covariate of poverty, with each country having a weight of 1. Table 2 above has summary statistics on the various covariates of poverty, thus providing information on the availability of data from the different countries pooled together in these regressions. The per capita poor are defined using the $3.20 line for all countries, and the root N poor are defined using the root N-equivalent poverty line, which is country-specific (see Table 7). The per capita poor only are those individuals who are only poor by the per capita allocation rule but not the root N allocation rule. The regressions run on a subsample of household heads only. Each country has a weight equal to millions of poor. The per capita millions of poor and root N millions of poor are the same, due to the use of a root N equivalent poverty line that yields the same poverty rate as the rate obtained when the per capita allocation rule is used (see Table 7). Column 4 indicates the results of a test of equality between the coefficients reported in columns 2 and 3 under the assumptions of seemingly unrelated regressions. Column 7 indicates the results of a test of equality between the coefficients reported in columns 5 and 6 under the assumptions of seemingly unrelated regressions.

40