Ending extreme poverty is likely to be one of the UN Sustainable Development Goals for 2030. So it is a good idea to figure out what that entails. And it turns out that it’s become more complex in the last year or so. That’s because new price data, 2011 Purchasing Power Parity (PPP) estimates, were released in 2014 and the World Bank’s global poverty database, PovcalNet, also had a substantial update.
The methodology for the 2011 price data is thought to be superior to that used for the previous 2005 PPP rates. However, using the new 2011 PPPs to estimate global poverty and inequality remains contentious.
The changes to the PPPs are not trivial for many countries and in particular a number of populous countries that matter to both global poverty and global inequality estimates have quite different data in 2005 and 2011 PPPs.
In a new CGD Working Paper, Peter Edward and I take a closer look.