What do poverty lines measure, anyway?


A chart showing that the percentage of people living in extreme poverty (under US$2 per day) has declined from 90% in 1820 to 10% in 2015

Over at Vox, Dylan Matthews has summarized a fascinating discussion between economists and anthropologists over whether global poverty is actually falling in ways that are meaningful for poor people’s quality of life.  The whole article is very much worth reading.  Here are some of the points that really stood out to me.

First, everyone agrees that the US$1.90 per day poverty line is relevant for measuring progress, but is still extremely low in terms of actual consumption.

  • “The $1.90/day (2011 PPP) line is not an adequate or in any way satisfactory level of consumption; it is explicitly an extreme measure. Some analysts suggest that around $7.40/day is the minimum necessary to achieve good nutrition and normal life expectancy, while others propose we use the US poverty line, which is $15.”
  • “The proportion of people living under $1.90 per day has declined significantly, but poverty as measured by $7.40/day has declined more slowly, from 70.8 percent in 1981 to 58.1 percent in 2013.”

Second, debates like these are part of why multidimensional poverty indicators are important.

Hickel agrees with Gates, Pinker, Roser, etc. that some material living standards outside of poverty and consumption have improved in recent decades. According to the UN Population Division’s numbers (compiled by Our World in Data, naturally), life expectancy in China rose from only 43 years in 1950 to 76 in 2015 ([even growing] while Mao was killing tens of millions of people). India’s life expectancy grew from 35 to 68 over the same period; in the Democratic Republic of Congo, it grew from 38 to 59. Likewise, literacy rates and years of schooling have increased.

Third, there’s an extremely important point about how poverty interacts with political authority.

Hickel’s broader view is that what the 19th century saw was a process of forced dispossession by colonizing nations, which transformed a period of affluence and comfort for conquered native peoples into one of rapacious capitalism. Rather than the constant march of progress that Hickel perceives charts like Roser’s to portray, what happened was profound violence and dislocation that can hardly be called “escaping poverty.” Sure, a Zulu citizen before British conquest might not have earned hard currency, but she had a far better quality of life than the one the imperialists offered her, Hickel argues.

… The factual disagreement, then, is more over whether precolonial societies can be meaningfully said to be “in poverty” when monetary poverty wasn’t really a relevant concept.

I highly recommend James Scott’s Against the Grain: A Deep History of the Earliest States for more on the latter point, which I think is underdiscussed.