Living below the international poverty line Metadata

Proportion of the population living below the international poverty line

Living below the international poverty line

PovertyBelowIntLine

Aligned with SDG 1.1.1 indicator, which defined as the percentage of the population living on less than $3.00 a day based on 2021 purchasing power parities (PPP).
In practice, international poverty lines vary by country depending on the country classification applicable in the survey year (see World Bank country classification). The $3.00 per person per day line is applied for low-income countries, US$4.20 for lower-middle-income countries and US$8.30 for upper-middle- and high-income countries.

National poverty lines vary across countries and time, and they have a strong economic gradient, such that richer countries tend to adopt higher standards of living when defining poverty. PPPs are used to convert national poverty lines and the value of household incomes and consumption to a common currency across countries, while capturing differences in living costs around the world.
Since 1990, the World Bank has produced global estimates of the population living in extreme poverty. This benchmark is derived from poverty thresholds in the world’s poorest countries and reflects the minimum resources required to meet basic needs such as food, clothing, and shelter. The international poverty line has been integrated into the Sustainable Development Goals as a key indicator for monitoring progress in poverty reduction.
Applying the international poverty line to forcibly displaced and stateless populations provides a consistent basis for cross-country comparisons and global benchmarking. It highlights disparities in living standards among forcibly displaced and stateless populations. Moreover, this approach enables both humanitarian and development actors to assess refugees’ socio-economic conditions, informing evidence-based program design and resource allocation.

The proportion of the population living on less than the applicable poverty line (e.g. $3.00 a day in low-income countries based on 2021 PPPs).
The formula for calculating the proportion of the population living below the poverty line, or headcount index, is as follows:

P0=1N0∑Ni=1l(yi<z)=NpNP0=1N0∑i=1Nlyi<z=NpN

Where 𝐼(. ) is an indicator function that takes on a value of 1 if the bracketed expression is true, and 0 otherwise. If individual consumption or income 𝑦𝑖 is less than the international poverty line 𝑧, then 𝐼(. ) is equal to 1 and the individual is counted as poor. 𝑁𝑝 is the total, number of poor. 𝑁 is the total population.

International definition and standards

The timeliness, frequency, quality, and comparability of household surveys need to increase substantially, particularly in the poorest countries. The availability and quality of poverty monitoring data remain low in small states, countries with fragile situations, and low-income countries and even some middle-income countries. The low frequency and lack of comparability of the data available in some countries create uncertainty over the magnitude of poverty reduction.
Besides the frequency and timeliness of survey data, other data quality issues arise in measuring household living standards. The surveys ask detailed questions on sources of income and how it was spent, which must be carefully recorded by trained personnel. Income is generally more difficult to measure accurately, and consumption comes closer to the notion of living standards. And income can vary over time even if living standards do not. But consumption data are not always available: the latest estimates reported here use consumption data for about two-thirds of countries.
However, even similar surveys may not be strictly comparable because of differences in timing or in the quality and training of enumerators. Comparisons of countries at different levels of development also pose a potential problem because of differences in the relative importance of the consumption of nonmarket goods. The local market value of in-kind consumption (including own production, particularly important in underdeveloped rural economies) should be included in total consumption expenditure but may not be. Most survey data now include valuations for consumption or income from own production, but valuation methods vary.