# 1. Introduction

Poverty is usually defined as the insufficiency of resources to ensure the basic conditions of subsistence and well-being of individuals in a society. Given its broad importance for policy, monitoring poverty has become a well-established practice around the globe, with the headcount ratio (Foster et al., 1984) being the leading measure for the state of poverty in a country. The measure estimates the share of a population that lives below a monetary threshold deemed to be sufficient to cover the minimum needs of the population – also known as the poverty line.

Despite high levels of inequality and food insecurity (Hoffman, 2021), Brazil has not adopted an official poverty measurement methodology and thus does not have an official poverty line. To identify and track poverty, many researchers rely instead on several administrative lines used to determine eligibility for social assistance programs, such as the eligibility thresholds for the Bolsa Familia Program (Programa Bolsa Família; PBF) and the Cadastro Único eligibility threshold.<sup>1</sup> In addition, Brazil’s national statistical institute, the Instituto Brasileiro de Geografia e Estatística (IBGE), uses the World Bank international poverty lines (US$1.90, US$5.50) in their synthesis report of social indicators (IBGE, 2020).

The use of administrative and international poverty lines, however, is not ideal for monitoring national poverty. While the former may not adequately capture the cost of meeting basic needs, the latter are “reference points” based on poverty line values of comparable countries. The international poverty lines, fixed at US$3.20 and US$5.50 per day (in 2011 purchasing power parity dollars), reflect only typical national poverty thresholds in middle-income countries (World Bank, 2018).

This study contributes to the body of literature aiming to define a poverty line for the Brazilian case. With the exceptions of World Bank (2007) and Rodrigues et al. (2018), in which national poverty line estimates were estimated, most studies have focused on using caloric insufficiency to construct regional poverty lines for Brazil (Rocha, 2000; Barros and Feres, 2003; Ferreira, Lanjouw and Neri, 2003; Silveira et al., 2007). All of them use data that is over a decade old. To the best of our knowledge, this study is the first attempt to estimate a poverty line for Brazil based on the most recent data (2017/18) and applying the well-established cost-of-basic-needs approach (Ravallion, 1998).

Our preferred specification results in a food poverty line of R$258 (in 2018 Southeast urban prices) per person per month.<sup>2</sup> This would be enough to cover basic nutritional requirements. The (lower) total poverty line – which accounts for other nonfood necessities as well –is estimated at R$455. The estimation of a poverty line as presented here is a time intensive and technical exercise that requires a range of decisions at different steps of the procedure. As such, our preferred results for the food and total poverty lines are reflective of the specific choices taken and assumptions made along the estimation process. We aim to be transparent about the assumptions made in the estimation of our poverty line, as well as about

> 1 The Cadastro Único refers to the national social registry administered by the Citizenship Ministry. Individuals and households who plan to apply for benefits of any public program must enroll in the Cadastro Único. As of June 2021, there were over 77.8 million individuals (30.2 million families) in the registry.

> 2 This is equivalent to US$3.46 per person per day in 2011 purchasing power parity terms.

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