Comparison of Methods of Poverty Rates Measurement

Abstract

There is a lot of poverty lines used in the world. Commonly lines employed to determine the level of global poverty are the World Bank’s poverty lines. This institution used in the past one international poverty line ($1 from 1990 and $1.25 from 2008 to 2014), but now the World Bank employs a few poverty lines to adapt them to income situation in the countries. There are used $1.9, $3.2 and $5.5 lines. Calculations of the percentage of poor people (so-called poverty rate) using these three lines give different results. Besides, each country employs its own line (so-called national lines) to determine the poverty rate in own country. To assess the agreement between international and national methods of measurement of poverty rates, Bland-Altman plots and Passing-Bablok regression were applied. The data about poverty rates in 102 countries were used in the study. The analysis was conducted for all countries and in groups of countries according to their income situation (low-income, lower-middle-income, upper-middle-income, and high-income countries). The analysis was preceded by an assessment of the strength of association between income group and poverty prevalence (Cramer’s V), and of the degree of correlation between national and international poverty rates (Spearman’s rank correlation). The study showed that national and international poverty lines are not substitutes and give different information about the poverty level. International poverty lines give information about global poverty, but they do not include regional specificity which is incorporated in national poverty lines.