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Pessimistic on poverty TheEconomist argued that the WorldBank has overstated the extent of absolute poverty in the world -- that there is less poverty than theBank claims and that it is falling faster.

A、methodological debate lies at the heart of this claim. TheBank relies as much as possible on nationally representative household surveys, typically done by governmental statistics offices following international standards. TheBank’’s latest estimates draw on interviews with about 1. 1 million randomly sampled households in 100 developing countries, representing 93% of the population of the developing worlD、TheBank’’s method of measuring poverty from surveys follows long-standing practices.But it is not the only possible approach. TheEconomist points to an alternative method that ignores data on levels of income or consumption from surveys.Instead the poverty measures are anchored to national accounts data, using the surveys only to measure inequality -- the shares of total income accruing to different income groups. It is unclear why proponents of this approach think that surveys can be trusted for measuring inequality, but not levels of poverty.How much does the choice matter
A、striking graph in the issue of March 13th compares two sets of estimates, one from theBank’’s researchers and one using this alternative method, namely the estimates made by Xavier Sala-i-Martin atColumbia U-niversity. His series shows a much steeper decline in absolute poverty and a much lower level in recent years than that found by theBank’’s researchers.This month, the WorldBank’’s numbers has shown there have been superseded: the series shown began only in the late 1980s, and cannot be properly compared with Mr Sala-i-Martin’’s estimates, which go further back. The period under consideration makes a big difference. The late 1980s and early 1990s were a difficult time for the world’’s poor. Using either a longer period or a shorter one changes the picture a lot.TheBank currently estimates that the world poverty rate fell from 33% in 1981 (about 1.5 billion people) to 18% in 2001 (1.1 billion), when judged by the frugal $1-a-day standard at 1993 purchasing-power parity.Compare this with Mr Sala-i-Martin’’s estimates. He finds that the global poverty rate fell from 13% to 7% (in 1998).Yes, the levels differ substantially.But by both methods, the global poverty rate almost halveD、The two trends are also similar for the 1990s, once growth had been restored inChina and Indi
A、Why are theBank’’s poverty counts so much higher Mr. Sala-i-Martin uses GDP from national accounts to measure the average income per person of households.But GDP includes much more than household consumption; private investment and government spending, for example. This method must give lower poverty counts relative to a common poverty line. But why would one use the same poverty line for GDP as for household consumption TheBank’’s $1-a-day line is based on the poverty lines actually found in low-income countries, and those lines do not include allowances for investment and government spending; they typically include only the most basic food and other consumption needs. To compare Mr Sala-i-Martin’’s numbers with theBank’’s, one should use a higher poverty line for the former.It is not clear how much higher Mr Sala-i-Martin’’s poverty line should be to assure comparability with theBank’’s $1-a-day standarD、However, a good guess might be that his poverty threshold should be doubled to reflect the other items that he has implicitly included in his measure of income. Then, in fact, the two series line up rather well.Good news, for some Despite the methodological differences, a similar trend of long-term reduction in poverty does emerge. That is certainly good news -- but no cause for complacency. The 400 million people who escaped absolute poverty by the $ 1-a-day standard over 1981-2001 are still poor
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