Purchasing power parities and the Dollar-A-Day approach: An unstable relationship


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Date

2021-09

Publication Type

Journal Article

ETH Bibliography

yes

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Abstract

We show that the Dollar-A-Day methodology in global poverty measurement provides inconsistent International Poverty Line (iPL) solutions when a complete set of consistency criteria in the iPL definition is used. This article illustrates that minor fluctuations in purchasing power parity exchange rates can yield inconsistent iPLs. We find a rate of inconsistency of 46.1% and we conclude that this is a worrisome attribute of the method.

Publication status

published

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Volume

206

Pages / Article No.

109974

Publisher

Elsevier

Event

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Subject

Global Poverty; PPP; Error; Dollar-A-Day; Inconsistency; Monte Carlo

Organisational unit

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