Measuring poverty

Recent trends in absolute poverty
Poverty is usually measured as either absolute or relative poverty (the latter being actually an index of income inequality). Absolute poverty refers to a set standard which is consistent over time and between countries. An example of an absolute measurement would be the percentage of the population eating less food than is required to sustain the human body (approximately 2000-2500 calories per day for an adult male).
The World Bank defines extreme poverty as living on less than US $1 (PPP) per day, and moderate poverty as less than $2 a day, estimating that "in 2001, 1.1 billion people had consumption levels below $1 a day and 2.7 billion lived on less than $2 a day."[3] The proportion of the developing world's population living in extreme economic poverty fell from 28 percent in 1990 to 21 percent in 2001.[3] Looking at the period 1981-2001, the percentage of the world's population living on less than $1 per day has halved.
Most of this improvement has occurred in East and South Asia.[4] In East Asia the World Bank reported that "The poverty headcount rate at the $2-a-day level is estimated to have fallen to about 27 percent [in 2007], down from 29.5 percent in 2006 and 69 percent in 1990."[5]
In Sub-Saharan Africa extreme poverty went up from 41 percent in 1981 to 46 percent in 2001, which combined with growing population increased the number of people living in poverty from 231 million to 318 million.[6]
In the early 1990s some of the transition economies of Eastern Europe and Central Asia experienced a sharp drop in income.[7] The collapse of the Soviet Union resulted in large declines in GDP per capita, of about 30 to 35% between 1990 and the trough year of 1998 (when it was at its minimum). GDP per capita in Ukraine dropped from $7,185 in 1990 to $3,628 in 1996.[8] As a result poverty rates also increased although in subsequent years as per capita incomes recovered the poverty rate dropped from 31.4% of the population to 19.6%[9][10]
World Bank data shows that the percentage of the population living in households with consumption or income per person below the poverty line has decreased in each region of the world since 1990:[11][12]
Region 1990 2002 2004
East Asia and Pacific 15.40% 12.33% 9.07%
Europe and Central Asia 3.60% 1.28% 0.95%
Latin America and the Caribbean 9.62% 9.08% 8.64%
Middle East and North Africa 2.08% 1.69% 1.47%
South Asia 35.04% 33.44% 30.84%
Sub-Saharan Africa 46.07% 42.63% 41.09%
Other human development indicators have also been improving. Life expectancy has greatly increased in the developing world since WWII and is starting to close the gap to the developed world. Child mortality has decreased in every developing region of the world.[citation needed] The proportion of the world's population living in countries where per-capita food supplies are less than 2,200 calories (9,200 kilojoules) per day decreased from 56% in the mid-1960s to below 10% by the 1990s. Similar trends can be observed for literacy, access to clean water and electricity and basic consumer items.[13]
There are various criticisms of these measurements.[14] Shaohua Chen and Martin Ravallion note that although "a clear trend decline in the percentage of people who are absolutely poor is evident ... with uneven progress across regions...the developing world outside China and India has seen little or no sustained progress in reducing the number of poor".
Since the world's population is increasing, a constant number living in poverty would be associated with a diminshing proportion. Looking at the percentage living on less than $1/day, and if excluding China and India, then this percentage has decreased from 31.35% to 20.70% between 1981 and 2004.[15]
The 2007 World Bank report "Global Economic Prospects" predicts that in 2030 the number living on less than the equivalent of $1 a day will fall by half, to about 550 million. An average resident of what we used to call the Third World will live about as well as do residents of the Czech or Slovak republics today. Much of Africa will have difficulty keeping pace with the rest of the developing world and even if conditions there improve in absolute terms, the report warns, Africa in 2030 will be home to a larger proportion of the world's poorest people than it is today.[16]http://en.wikipedia.org/wiki/Poverty