# **<mark>1. Introduction</mark>**

<mark>The World Bank has set an ambitious target to eradicate global extreme poverty by 2030 and evaluating progress towards it requires a solid data infrastructure. In April of 2013, the World Bank set two goals to guide its work in the coming years – the first is to eradicate extreme poverty from the world by 2030, while the second is to promote shared prosperity. The first goal will be achieved if the incidence of extreme poverty falls below 3 percent by 2030, while the second goal would be implemented by increasing the average welfare of those who earn at the 40</mark><sup>th</sup> <mark>percentile or below in each country (Jolliffe et al., 2014). To achieve the first goal, it will be important to allocate resources to countries where extreme poverty is most prevalent. However, poverty comparisons across countries are partly influenced by the quirks of each country’s surveys. A thorough analysis is needed to understand the similarities and differences of these survey data collection procedures, and how much they affect reported poverty rates.</mark> <mark>Global extreme poverty is measured using the international poverty line, currently set at $1.90 per person per day in 2011 dollars (international poverty rate from now on).</mark><sup>2</sup> <mark>Anyone consuming less than that amount, or earning less than that amount in countries that use income rather than consumption as their primary welfare measure, is assumed to be extreme poor. In addition, each country sets its own official poverty line to assess national poverty, with the line depending on the levels of consumption in each country. Therefore, official poverty lines and the subsequent national poverty rates generated using these lines are not comparable across countries (national poverty rates from now on). To generate international poverty estimates, the World Bank has created an international poverty line, which is applied consistently to all countries to monitor global extreme poverty. A line of $1 per day was first estimated in 1990 and has been repeatedly updated to take into account the changes in the purchasing power parity of countries (Ravallion et al., 2009).</mark><sup>3</sup> <mark>The last update of the international poverty line was done in 2015, when it was raised to $1.90 per person per day according to the 2011 values of purchasing power parity exchange rates (Ferreira, et al, 2016).</mark> <mark>The extreme poor are concentrated in Sub-Saharan Africa and South Asia. Table 1 shows the number and proportion of the international extreme poor in 2013 by regions. On average, 12.6 percent of the world’s population, or about one in eight of the world’s population lives in international extreme poverty. Sub-Saharan Africa and South Asia have the highest and second highest number and proportion of international extreme poor, with 50.7 percent and 33.4 percent of the world’s international extreme poor living in these two respective regions.</mark> <mark>A recent report by the Commission on Global Poverty to improve global poverty monitoring highlights the considerable uncertainty in global poverty point estimates. Since adopting the twin goals, the World Bank has devoted considerable amount of attention to improving its measure of</mark>

> 2 <mark>This line was calculated in the following way: (i) the national poverty lines of 15 poor countries was selected, (ii) those poverty lines were inflated to 2011 levels using the CPI of those countries, (iii) the inflated poverty lines were then converted to US dollars using the 2011 PPPs, and (iv) finally, those PPP dollar-denominated poverty lines were averaged to come up with a new poverty line, which was close to $1.90 per person per day (Ferreira et al., 2016). The countries in the reference category are Malawi, Mali, Ethiopia, Sierra Leone, Niger, Uganda, The Gambia, Rwanda, Guinea-Bissau, Tanzania, Tajikistan, Mozambique, Chad, Nepal and Ghana (Ferreira et al., 2016).</mark>

> 3 For more information, consult the World Development Report of 1990. https://openknowledge.worldbank.org/bitstream/handle/10986/5973/ WDR%201990%20-%20English.pdf?sequence=5.

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