Carl Bialik recently wrote about the flaws in the way that the World Bank calculates poverty levels. I include an excerpt:
[T]o some economists, the World Bank’s definition of poverty is flawed, arbitrary and tends toward suppressing the numbers. Sanjay Reddy, a Columbia University economist and longtime critic of the bank’s counts, says, “If their dream is a world free of poverty, they ought to know how to measure it.”
The bank defines poverty as living each day on less than the local equivalent of what $1.08 could buy in 1993. That’s the median of national poverty lines in 10 poor countries. Incomes or expenditures are measured by individual countries’ household surveys, then converted to dollars in terms of purchasing power.
Each of these steps introduces potential pitfalls. National poverty lines are set by local governments and there isn’t any standard for defining them. “It is silly to use national poverty lines to arrive at a global poverty line,” says Nanak Kakwani, an economist and visiting scholar at University of Sydney, Australia.
I know nobody who could live on a dollar a day, even in 1993.
We can only accurately measure poverty by whether or not people have access to the necessities or not. To arrive at correct numbers, we must count a person as poor if they cannot stably afford sufficient food, clothes, shelter, and healthcare.