<mark>As the year of survey may not align with the year the $1.90 international poverty line was estimated (2011), the international poverty line might need to be intertemporally deflated before it is applied to the national consumption aggregates of some countries. To do so, the international poverty line set in 2011 dollars is converted to local currency using the 2011 purchasing power parity (PPP) conversion factor. This number is then intertemporally deflated to the year the survey was undertaken, and this is usually done using the respective CPI of each country.</mark> <mark>Table 8 lists the country-level CPI and PPP that are used to intertemporally deflate the international poverty line to local currency units. For example, to calculate the international poverty line expressed in Bangladeshi local currency for the year 2010 so that it can be applied to the HIES (2010) we do the following. First, the 2011 PPP for Bangladesh (24.85) is multiplied by the international poverty line ($1.90), and this is then deflated using the intertemporal deflator (which it is 0.90). Thus, the daily international poverty line expressed in local currency comes out to be: 1.90 x 24.85 x 0.9 = 42.65 takas.</mark> All countries in South Asia except for Afghanistan and Bangladesh use the CPI to deflate the international poverty line. Bangladesh uses the Basic Need Price Index (BNPI) that is constructed based on Bangladesh's population weighted upper poverty lines, so it measures the changes in the cost of basic needs. This methodological approach was adopted for Bangladesh because Gimenez and Jolliffe (2014) argue that the weights used to construct the CPI are not representative of the consumption pattern of the poor. This view aligns with Recommendation #9 of the Monitoring Global Poverty report, which specifies that countries should consider using a price index for the poor. It is also consistent with the belief that price changes implied by the Bangladesh survey data are closer to the changes of the poverty line than the CPI.

While the CPI shows how the expenditure to purchase a specific bundle of goods consumed by the average consumer changes nationally, there are a few problems with using the CPI as a deflator for poverty measurement: (i) unit values changes of some consumption items can vary differently from the CPI for this item, (ii) the CPI measures how price changes nationally, and not by region, so it does not reflect price changes of specific regions of the country; or more importantly, it may not accurately identify the poor in regions with high levels of deprivation, and (iii) the goods in the poor’s basket may not align well with the CPI basket, as the international extreme poor may consume items that are different from what a typical consumer consumes in a country. This last point is validated by Dupriez (2007) and Deaton and Dupriez (2009 and 2011) that document that the expenditure patterns of poor households are different from the pattern observed in the System of National Accounts.

<mark>Overall, this section shows that there are many sources that can substantially contribute to the total error of poverty estimates and influence international poverty comparisons. The comparison of survey design and sampling methodologies shows that differences in data collection methods across countries are relatively minor. The main source of total error involves differences in how consumption is collected and aggregated at the household level, particularly related to the way in which countries treat actual and imputed rent. In addition, the use of poverty lines to deflate intertemporal prices instead of the CPI can also contribute to total error in the international poverty rate estimates in the case of Bangladesh.</mark> 13