There are a few final remarks. First, all projections below show the global poverty rates against the world population rather than the developing world’s population following the definition of the new World Bank Group’s goal. Ravallion (2013) follows the MDG approach whereby poverty rates are estimated for the sum of populations of all developing countries as of 1990. It is assumed that the population in the developed countries living on less than US$1.25 per day is negligible. Second, Ravallion (2013) conducted projections using the 2008 distributions of household expenditure per capita since the 2010 distributions were not available when the paper was written. However, below, we use the 2010 distributions available in PovcalNet. The database in PovcalNet and population projections will change whenever new or revised household survey data are provided to the World Bank. Therefore, all projections here are also subject to changes. All analyses below are conducted using the PovcalNet database and population projections available on October 10, 2013.

# **V. Results and Decomposition of Contributors**

There are several factors that can affect global poverty rates. To decompose the effect, we gradually add a new assumption and observe any resulting increase in the poverty rate.

The first projection assumes growth rates of mean household expenditure per capita (or simply the survey mean) and population are uniform across countries (see scenario (i) in Table 4). The uniform growth rate of the survey mean is assumed at 4.7 percent, which was the average annual growth rate of the developing world between 2002 and 2010. This approach is close to that of Ravallion (2013) except that (i) the global poverty rate is now estimated against the world population rather than the population of the developing world, and (ii) the growth rate of the survey mean is set at 4.7 percent. Under this scenario, the global poverty rate is projected to be around 2.1 percent by 2030.

The second projection assumes country-specific population growth rates while assuming the uniform growth rate of the survey mean to be 4.7 percent (see scenario (ii) in Table 4). Introducing the countryspecific population growth increases the global poverty rate from 2.1 percent to 2.8 percent. This means the global poverty rate increases by one third, which is large. Such an increase happens because populations of poorer countries or regions grow faster.

The third projection assumes that for each country, the survey mean grows at its own average growth rate for the period between 2002 and 2010 and while maintaining country-specific population projections of the World Bank Data Group (see scenario (iii) in Table 4). This introduces full variations in country-level growths, but does not still incorporate the effects of changing inequality or distribution.

Introduction of country-specific growth effects has a large impact on the global and regional poverty projections. It increases the global poverty rate substantially, from 2.8 percent to 8.5 percent. If we focus on the developing world, the introduction of country-specific growth effects increases the poverty rate of the developing world from 3.2 percent to 9.8 percent.

The fourth and final projection uses country-specific and inequality-adjusted growth rates (see scenario (iv) in Table 4). Introduction of the inequality adjusted growth has a very limited impact once countryspecific growth effects are incorporated – the global poverty rate increases from 8.5 percent to 8.6 percent. The poverty rate of the developing world also increases only marginally from 9.8 percent to 9.9 percent. Although the global impact of within-country inequality is limited, regional projections suggest that it has had significant impact for some regions but the impact is largely offset. For example, consideration of changes in inequality over time reduces poverty rates in LAC and EAP, while it increases poverty rates in ECA and SAR.

These results here are broadly in accordance with Lanjouw et al. (2013) that applied a set of assumptions comparable to but less optimistic than those in Ravallion (2013). Lanjouw et al. (2013) projected poverty 13