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American Economic Journal: Applied Economics: Vol. 3 No. 2 (April 2011)

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Purchasing Power Parity Exchange Rates for the Global Poor

Article Citation

Deaton, Angus, and Olivier Dupriez. 2011. "Purchasing Power Parity Exchange Rates for the Global Poor." American Economic Journal: Applied Economics, 3(2): 137-66.

DOI: 10.1257/app.3.2.137

Abstract

The global poverty count uses a common global poverty line, often referred to as the dollar-a-day line, currently $1.25 at 2005 international prices, whose construction and application depends on purchasing power parity (PPP) exchange rates for consumption. The price indexes that underlie the PPPs used for this purpose are constructed for purposes of national income accounting, using weights that represent patterns of aggregate consumption, not the consumption patterns of the global poor. We use household surveys from 62 developing countries to calculate global poverty-weighted PPPs and to calculate global poverty lines and new global poverty counts. (JEL C43, E21, F31, I32, O15)

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Authors

Deaton, Angus (Princeton U)
Dupriez, Olivier (World Bank)

JEL Classifications

C43: Index Numbers and Aggregation; leading indicators
E21: Macroeconomics: Consumption; Saving; Wealth
F31: Foreign Exchange
I32: Measurement and Analysis of Poverty
O15: Economic Development: Human Resources; Human Development; Income Distribution; Migration

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