Abstract
We show that the Dollar-A-Day methodology in global poverty measurement provides inconsistent International Poverty Line (iPL) solutions when a complete set of consistency criteria in the iPL definition is used. This article illustrates that minor fluctuations in purchasing power parity exchange rates can yield inconsistent iPLs. We find a rate of inconsistency of 46.1% and we conclude that this is a worrisome attribute of the method.
Highlights
We show that the Dollar-A-Day methodology in global poverty measurement provides inconsistent International Poverty Line solutions when a complete set of consistency criteria in the iPL definition is used
The main aspect of the method is the derivation of an international poverty line that is applied to every country for any year, and is expressed in Purchasing Power Parity (PPP) international dollars
The Dollar-A-Day methodology for measuring global poverty is shown to be sensitive to very small fluctuations of the Purchasing Power Parity exchange rates, which are well within the error terms of the PPPs
Summary
The Dollar-A-Day (DAD) global poverty measurement approach can be traced in its latest version in Ferreira et al (2015). Purchasing Power Parity (PPP) exchange rates are instrumental in the traditional global poverty measurement utilized by the World Bank and the United Nations for monitoring global poverty within the Millennium and the Sustainable Development Goals agenda. Their main function is to convert local currencies into an international common denomination that would express the purchasing capacity of each household independent of local currency denominations. Instead they kept the same countries in the reference group of Ravallion et al (2009), thereby making their iPL to depend both in 2005 and 2011 PPPs
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
