collects just 47 non-food non-durable items, while Bangladesh and India include over 190 items, and Maldives 401 items. Maldives, Sri Lanka and Pakistan do not add durable goods in the consumption aggregate, but the rest of the countries do. Nepal and Afghanistan do not include health care expenditures, and India and Maldives do not include imputed rent of owner-occupied housing. Moreover, the methodology to collect consumption data also varies from country to country. For instance, Maldives does not include home production of goods in the national consumption aggregate, and Bangladesh, Pakistan and Sri Lanka do not include food/meals bought from outside the household as part of the national consumption aggregate.

Still, by far, the most important source of differences in the construction of consumption aggregates is the treatment of imputed rents. Except for Maldives, all the other countries in South Asia collect imputed rent of owner-occupied housing as part of the consumption aggregate. While India does not include imputed rent as part of its national consumption aggregate, it does collect that information for urban dwellers. We find that the absence of imputed rent of owner-occupied housing from the national consumption aggregates of India is the main factor that makes its proportion of international extreme poor the highest among South Asia.

Using the standardized consumption aggregate reduces the number of extreme poor in South Asia, and it also makes India appear equally poor as Bangladesh. While India has the largest proportion of international extreme poor when the national consumption aggregates are used to measure poverty, Bangladesh becomes the home to the largest proportion of international extreme poor in South Asia when standardized data sets are used. This is being driven by the most part by housing expenditures. The standardized data set includes imputed rent of owner-occupied housing in urban regions of India.

The choice of CPI also plays an important role in determining the number of poor. Each country deflates the international poverty line to align it with the year the survey was undertaken. Except for Bangladesh and Afghanistan, all the other countries use CPI to deflate the prices. The evidence from Bangladesh shows that if the CPI would be used to measure international poverty (instead of the official BNPI), then the proportion of poor would be overstated.

Spatial deflation has minor impacts on the international poverty rates measured at the country level, but it significantly affects urban and rural poverty rates. Currently, among countries in the region, only Nepal and Bhutan spatially deflate their national consumption aggregates when calculating the international poverty rate. The estimation of international poverty rates is not sensitive to spatial deflation, but this could be an important issue to study sub-national international poverty rates.

Non-monetary measures of poverty are more consistent with the standardized than the national consumption aggregates. To understand the standard of living of the international extreme poor of each country, we also look at other non-monetary welfare indicators. We find that, in some countries, the extreme poor fare better than in other countries. For example, the Pakistani extreme poor have the lowest levels of educational attainment, while Sri Lankans have the highest. We also find that the Indian international poor have better indicators of non-monetary well-being compared to the extreme poor of Bangladesh. This matches well with the notion that India overall is less deprived than Bangladesh.

22