Title

Person-Equivalent Poverty: An Introduction

Document Type

Article

Publication Date

9-22-2016

Published In

USAID Economics Brief

Abstract

In its 2015-16 Global Monitoring Report, the World Bank introduced the “person-equivalent headcount ratio” of Castleman, Foster, and Smith (2015), an intuitively appealing indicator that combines the conventional headcount ratio with the poverty gap index. This brief explains the new measure and some of its properties – including its simple relationship to the total monetary gap between the poverty line and the consumption of the poor – and shows how the global distribution of poverty shifts when examined through a person-equivalent lens. Not surprisingly, the prevalence of person-equivalent poverty is markedly higher than that of conventionally measured poverty in sub-Saharan Africa, reflecting the relatively severe depth of poverty in that region. It is considerably lower than conventional poverty in South and East Asia. We argue that for purposes of monitoring the severity of the global poverty challenge, person-equivalent poverty provides a better summary measure than either of its components.

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