Using the standardized consumption aggregates only partly mitigates some of the disparities observed in monetary and non-monetary indicators. Table 14 shows the different non-monetary indicators of well-being of the international extreme poor when identified using the standardized consumption aggregates rather than the national consumption aggregates. Bangladesh still scores much worse in many of the dimensions when compared with India. Bangladeshi international extreme poor have lower levels of educational attainment and lower levels of physical assets compared to their Indian counterparts, even though their dependency ratios and the proportion of households engaged in agriculture are similar. This is consistent with the common view that Bangladesh is poorer than India.

While the international extreme poverty rate shows that India has a much higher poverty rate than Bangladesh, further analysis of the non-monetary dimensions of well-being show that the depth of deprivation is higher in Bangladesh than in India, strongly suggesting that the international extreme poor in Bangladesh are worse off when compared to those in India. Monetary measures of poverty show that India and Bangladesh have similar rates of poverty when imputed rent is added for urban households and would show that India has a lower poverty rate if imputed housing rent was included for rural households.

# **7. Conclusions**

The World Bank has set an ambitious target of eliminating international extreme poverty by 2030 and has taken steps to obtain proper estimates of international extreme poverty. One of the key challenges in the measurement of poverty is how to identify the poor. The World Bank uses an international poverty line to identify the international extreme poor, which is currently set at $1.90 per person per day in 2011 PPP dollars. Measuring the consumption of goods and services by households is challenging and very sensitive to survey design and data collection methods. Thus, differences in the way that household surveys are designed and collected across countries can have significant effects on poverty measurement, which are amplified when doing international poverty comparisons.

In this paper, we examine how the construction of consumption aggregates at the country-level in South Asia adds to the total error that is implicitly part of any international poverty rate estimation. Indeed, when the World Bank recently convened a group of experts to identify how to improve the measurement of international extreme poverty, one of their main recommendations was to provide a margin of error with every poverty estimate. The rationale for this recommendation is that non-sampling errors, or ‘total error,’ could create a biased estimate of international extreme poverty. Although the region includes only eight countries, it has both the second highest number and proportion of international extreme poor. Additionally, all the countries use consumption aggregate as the basis to identify the poor. This makes the analysis both tractable and significant in the global context.

For each country, we document in detail the differences in the survey design and sampling, the use of spatial deflation and inter-temporal deflation, and assess the sensitiveness of the international poverty rate to the methodology used to construct the consumption aggregates. We find that there is significant variation in the methods used to measure poverty across countries in South Asia. Each country collects a different list of food items from households. For instance, Sri Lanka 21