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P R W P8073
Societal Poverty
A Relative and Relevant Measure
Development Data Group
Development Research Group
Poverty and Inequality Team
May 2017WPS8073Public Disclosure AuthorizedPublic Disclosure AuthorizedPublic Disclosure AuthorizedPublic Disclosure Authorized
Produced by the Research Support Team
?e Policy Research Working Paper Series disseminates the ?ndings of work in progress to encourage the exchange of ideas about development
issues. An objective of the series is to get the ndings out quickly, even if the presentations are less than fully polished. e papers carry the
names of the authors and should be cited accordingly. e ndings, interpretations, and conclusions expressed in this paper are entirely those
of the authors. ey do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and
its aliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.
P R W P 8073
is paper is a joint product of the Development Data Group and the Poverty and Inequality Team, Development Research
Group. It is part of a larger eort by the World Bank to provide open access to its research and make a contribution to
development policy discussions around the world. Policy Research Working Papers are also posted on the Web at http://
econ.worldbank.org. e authors may be contacted at djollie@worldb ank.org or eprydz@worldbank.org. Poverty lines are typically higher in richer countries, and lower in poorer ones, reecting the relative nature of national assessments of who is considered poor. In many high-income countries, poverty lines are explicitly rela- tive, set as a share of mean or median income. Despite systematic variation in how countries dene poverty, global poverty counts are based on xed-value lines. To reect national assessments of poverty in a global headcount of poverty, this paper proposes a societal poverty line. e proposed societal poverty line is derived from 699 harmo- nized national poverty lines, and has an intercept of $1 per day and a relative gradient of 50 percent of median national income or consumption. e societal poverty line is more closely aligned with national denitions of poverty than other proposed relative lines. By this relative measure, societal poverty has fallen steadily since 1990, but at a much slower pace than absolute extreme poverty.