Overall, there is no clear pattern in the selected LAC countries in terms of the population with zero incomes across years. For example, in Ecuador there was a steady decline in the share of such a population, while in Brazil, in contrast, the share was increasing after 2008. In other countries, shares fluctuated across years without a clear pattern. Changing shares of income earners can be a result of survey improvement or structural changes affecting shares of the self‐employed in the population. Irrespective of the reasons behind changes in the magnitude of the population with zero incomes, it is important to keep in mind that the impact of excluding zero earners on shared prosperity depends both on the overall magnitude of zero earners and fluctuation across reference years.

**Table 6. Share of population with zero income across countries and years in LAC**

|year|Peru|Ecuador|Chile|Brazil|Bolivia|
|---|---|---|---|---|---|
|2003|0.06|1.15|0.16|1.24||
|2004|0.01|1.02|||0.16|
|2005|0.00|1.22|||0.38|
|2006|0.00|0.64|0.11|0.72|0.49|
|2007|0.00|0.92|||0.34|
|2008|0.01|0.90||1.01|0.16|
|2009|0.01|0.83|0.23||0.47|
|2010|0.00|0.69||||
|2011|0.00|0.75||1.20|0.17|
|2012|0.01|0.62|||0.29|
|2013|0.00|0.45|0.15|1.44|0.26|
|Source: SEDLAC, microdata provid<br>calculations.|ed by regional focal points, memb|ers of the Global|Poverty Wo|rking Group. A|uthors’|

# **4. CONCLUSIONS**

Measuring the World Bank Group’s goal of shared prosperity is demanding in terms of access to and quality of microdata. Currently, corporate numbers on shared prosperity are estimated based on adjustments used for calculating international poverty headcount rates to ensure consistency for the two goals of the World Bank Group. This paper, for the first time, systematically explores how sensitive shared prosperity estimates are to the changes in these particular adjustments.

Empirical research reveals that the impact of applying grouped versus microdata has a minimal effect on estimates of shared prosperity. The means for the bottom 40 percent of the population obtained from grouped and microdata can differ substantially. However, given that the shared prosperity indicator is calculated for two points in time, the impact on the consumption per capita growth rate is much smaller if the differences in means are similar across two points in time. There is tentative evidence that the difference between grouped and microdata does not depend on the source of welfare aggregate ‐ income or consumption‐ but this requires more rigorous testing. Overall, the issue of using grouped versus microdata is less of a concern because the World Bank Group has started using microdata for corporate poverty and shared prosperity estimates since 2015.

Using a spatially adjusted or nominal welfare aggregate for measuring shared prosperity does not appear to have a substantial impact on the indicator itself, but can change the distribution. We did not discover significant differences in the shared prosperity indicator calculated based on nominal or spatially deflated welfare aggregates. However, it is crucial to control whether the price deflator is calculated consistently across years. Even small differences in average deflators across years may cause large discrepancies between estimates. Deflators can differ across years if the base area for the calculation of the price index changes over time.

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