The demand for internationally comparable estimates of poverty is considerable. Policy analysts, researchers and international donor agencies often want to compare the incidence of poverty across countries. These international comparisons can be carried out globally, regionally, or even across two countries.
The special chapter of Key Indicators 2008 sheds light on how alternative approaches to constructing Purchasing Power Parities (PPPs) influence internationally comparable estimates of poverty. In particular, it considers three sets of PPPs:
- The standard consumption PPPs used in generating the World Bank’s US Dollar 1-a-day poverty estimates;
- International Comparison Program (ICP PPPs);
- Poverty Survey (PS PPPs).
Crucially, the PS PPPs are based on prices collected from special, poverty-specific surveys of prices. These PS PPPs are the more relevant of the two sets of poverty PPPs to be used in making international comparisons of poverty.
