Identifying the Poor
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World Bank, Washington, DC
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Estimates of the number of people
living in extreme poverty, as reported by the World Bank,
figure prominently in international development dialogue and
policy. An assumption underpinning these poverty counts is
that there are no economies of scale in household size—a
family of six needs three times as much as a family of two.
This paper examines the sensitivity of global estimates of
extreme poverty to changing this assumption. The analysis
rests on nationally representative household surveys from
162 countries covering 98 percent of the population
estimated to be in extreme poverty in 2017. The paper
compares current-method estimates with a constant-elasticity
scale adjustment that divides total household consumption or
income not by household size but by the square root of
household size. While the regional profile of extreme
poverty is robust to this change, the determination of who
is poor changes substantially—the poverty status of 270
million people changes. The paper then shows that the
measure that accounts for economies of scale is
significantly more correlated with a set of presumed poverty
covariates (years of schooling, literacy, asset index,
working in agriculture, access to electricity, piped
drinking water, and improved sanitation).
Palabras clave
GLOBAL POVERTY, HOUSEHOLD ECONOMIES OF SCALE, SUSTAINABLE DEVELOPMENT GOALS, EXTREME POVERTY ESTIMATE, POVERTY COVARIANTS, POVERTY MEASUREMENT, POOR HOUSEHOLD SIZE