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Price indexes, inequality, and the measurement of world poverty

Angus Deaton ()

No 1207, Working Papers from Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies.

Abstract: I discuss the measurement of world poverty and inequality, with particular attention to the role of PPP price indexes from the International Comparison Project. Global inequality increased with the latest revision of the ICP, and this reduced the global poverty line relative to the US dollar. The recent large increase of nearly half a billion globally poor people came from an inappropriate updating of the global poverty line, not from the ICP revisions. Even so, PPP comparisons between widely different countries rest on weak theoretical and foundations. I argue for wider use of self-reports from international monitoring surveys, and for a global poverty line that is truly denominated in US dollars.

Keywords: poverty measurement; price indexes; International Comparison Project (search for similar items in EconPapers)
JEL-codes: C80 D31 D63 E01 I32 (search for similar items in EconPapers)
Date: 2010-01
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Journal Article: Price Indexes, Inequality, and the Measurement of World Poverty (2010) Downloads
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