Data

Poverty: Share of population living on less than $3.65 a day

World Bank
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What you should know about this indicator

  • A poverty line of $3.65 a day represents definitions of national poverty lines in lower-middle-income countries.
  • The data is measured in international-$ at 2017 prices – this adjusts for inflation and for differences in the cost of living between countries.
  • Depending on the country and year, the data relates to income measured after taxes and benefits, or to consumption, per capita. 'Per capita' means that the income of each household is attributed equally to each member of the household (including children).
  • Non-market sources of income, including food grown by subsistence farmers for their own consumption, are taken into account.
Learn more in the FAQs
Poverty: Share of population living on less than $3.65 a day World Bank
Percentage of population living in households with an income or consumption per person below $3.65 a day
Source
World Bank Poverty and Inequality Platform (2024) – with major processing by Our World in Data
Last updated
March 27, 2024
Next expected update
September 2024
Date range
1963–2023
Unit
%

Frequently Asked Questions

What is the International Poverty Line and how is it set?

There is no single definition of poverty. Our understanding of the extent of poverty and how it is changing depends on which definition we have in mind.

In particular, richer and poorer countries set very different poverty lines in order to measure poverty in a way that is informative and relevant to the level of incomes of their citizens.

For instance, while in the United States a person is counted as being in poverty if they live on less than roughly $24.55 per day, in Ethiopia the poverty line is set more than 10 times lower – at $2.04 per day. You can read more about how these comparable national poverty lines are calculated in this footnote.4

To measure poverty globally, however, we need to apply a poverty line that is consistent across countries.

This is the goal of the International Poverty Line of $2.15 per day – shown in red in the chart – which is set by the World Bank and used by the UN to monitor extreme poverty around the world.

We see that, in global terms, this is an extremely low threshold indeed – set to reflect the poverty lines adopted nationally in the world’s poorest countries. It marks an incredibly low standard of living – a level of income much lower than just the cost of a healthy diet.

How does the World Bank set the International Poverty Line?

The exact method used by the World Bank to set the International Poverty Line has changed somewhat over past updates. But each time the objective has been broadly the same – to find a “typical standard by which the poorest countries of the world judge their citizens to be impoverished.”5

The method used in the latest update to arrive at a figure of $2.15, measured in 2017 international-$, is based on a set of harmonized national poverty lines produced by Dean Joliffe and others – shown in the chart here.

As you can see, there is a strong correlation between the poverty lines countries set, shown on the Y axis, and their income level – as measured here by GDP per capita, and plotted along the X axis.

The International Poverty Line is calculated as the median national poverty line adopted among low-income countries – using the World Bank’s income classification system. These are the countries shaded in red in the chart and found in the bottom left corner.

Although the International Poverty Line is by far the most prominent international line, the same method is also used by the World Bank to set two higher poverty lines that reflect the national definitions adopted in lower-middle and upper-middle income groups shown in green and purple respectively. The median poverty line among these two groups of countries are $3.65 and $6.85, and these form the World Bank’s lower-middle income and upper middle-income poverty lines.

You can read more about the methodology used to set these lines in the World Bank’s flagship report on poverty, Poverty and Shared Prosperity.

What are international-$ and why are they used to measure incomes?

Much of the economic data we use to understand the world – for instance on the goods and services bought or produced by households, firms and governments, or the incomes they receive – is initially recorded in terms of the units in which these transactions took place. That means this data starts out being expressed in a variety of local currencies – as so many rupees, US dollars, or yuan, etc. – and without adjusting for inflation over time. This is known as being in ‘current prices’, or in ‘nominal’ terms.

Before these figures can be meaningfully compared, they need to be converted into common units.

International dollars (int.-$) are a hypothetical currency that is used for this. It is the result of adjusting both for inflation within countries over time and for differences in the cost of living between countries.

The goal of international-$ is to provide a unit whose purchasing power is held fixed over time and across countries, such that one int.-$ can buy the same quantity and quality of goods and services no matter where or when it is spent.

The price level in the US is used as the benchmark – or ‘numeraire’ – so that one 2017 int.-$ is defined as the value of goods and services that one US dollar would buy in the US in 2017. Similarly, one 2011 int.-$ is defined as the value of goods and services that one US dollar would buy in the US in 2011.

The year 2017 (2011) here indicates two things, related to the two adjustments mentioned. Firstly, it tells us the base year used for the inflation adjustment within countries. This is the year whose prices are chosen to be the benchmark. If prices are higher than this benchmark year, nominal data will be adjusted downwards. If prices are lower, nominal data will be adjusted upwards. In the base year itself, the nominal and inflation-adjusted figures are the same by definition.

Secondly, 2017 (2011) indicates the year in which the differences in the cost of living between countries was assessed.

Purchasing Power Parity rates

Converting data in local currencies to international-$ means dividing the figures by a set of ‘exchange’ rates, known as Purchasing Power Parity (PPP) rates. Unlike the exchange rates between currencies you would see at the foreign exchange counter, these account for differences in the cost of living between countries.

If you have ever shopped or eaten in a restaurant abroad, you may have noticed a country as being a particularly expensive or particularly cheap place to live. A given amount of your own currency, when exchanged for another country’s currency, may buy you considerably more or less there than it would have done at home.

The goal of PPP rates is to account for these price differences. They express, for each country, the amount of local currency that is needed to buy the same goods and services there as 1 US dollar buys in the US.

You can read more about this in our article What are PPP adjustments and why do we need them?

The ‘rounds’ of the International Comparison Program

The calculation of PPP rates is the task of the International Comparison Program (ICP), which gathers data on the prices of thousands of goods and services in each country in a particular year.

The ICP does not calculate PPP rates every year, but rather conducts its work in ‘rounds’ that are several years apart. The most recent round was conducted in 2017 and the previous round was conducted in 2011.

In converting economic data to international-$, which round of PPPs are used to adjust for cost-of-living differences between countries is, in principle, a separate issue to the base year used to adjust for inflation over time. By convention, however, the same year tends to be chosen for both. When converted to 2017 international-$, nominal local currencies are first adjusted for inflation to local 2017 prices, and are then adjusted to US prices using the PPPs calculated in the ICP’s 2017 round. Likewise, 2011 international-$ adjust for inflation using 2011 local prices, and then use the 2011 PPPs to adjust for cost-of-living differences.

How comparable is the World Bank data on household incomes across time or between countries?

Because there is no global survey of incomes, researchers need to rely on available national surveys. Such surveys are designed with cross-country comparability in mind, but because the surveys reflect the circumstances and priorities of individual countries at the time of the survey, there are some important differences. In collating this survey data the World Bank takes steps to harmonize it where possible, but comparability issues remain.

One important issue is that, whilst in most high-income countries the surveys capture people’s incomes, in poorer countries these surveys tend to capture people’s consumption.

Pooling the data available from different kinds of survey data is unavoidable if we want to get a global picture of poverty or inequality. But it’s important to bear in mind that, depending on the country or year, somewhat different things are being measured.

The two concepts are nevertheless closely related: the income of a household equals their consumption plus any saving, or minus any borrowing or spending out of savings.

One important difference is that, while zero consumption is not a feasible value – people must consume something to survive – a zero income is a feasible value. At the bottom end of the distribution, people’s consumption may be somewhat higher than their income. A common example here is retired people who are using their savings: they may have a very low, or even zero, income, but still have a high level of consumption.

Conversely, at the top end of the distribution, consumption is typically lower than income. The gap rises with income, with households generally saving a higher share of their income the richer they are. For both these reasons, the distribution of consumption is generally more equal than the distribution of income.

There are a number of other ways in which comparability across surveys can be limited. In collating this survey data the World Bank takes a range of steps to harmonize it where possible, but comparability issues remain. The PIP Methodology Handbook provides a good summary of the comparability and data quality issues affecting this data and how it tries to address them.

To help communicate this limitation of the data, the World Bank produces a companion indicator that groups data points within each individual country into ‘spells’. The surveys underlying the data within a given spell for a particular country are considered by World Bank researchers to be more comparable. The breaks between these comparable spells are shown in the chart below for the share of population living in extreme poverty. You can select to see these breaks for any indicator in our Data Explorer of the World Bank data. These spells are also indicated in our data download of the World Bank poverty and inequality data.

How does the World Bank produce global and regional estimates of poverty and inequality from national data?

For its poverty and inequality data the World Bank relies on household surveys that are conducted nationally. In order to produce global or regional estimates, the survey data from different countries needs to be lined up and aggregated. For each year, the World Bank finds the closest survey for each country and projects the data forward or backwards to the year being estimated. This is necessary particularly since surveys are less frequently available in poorer countries and for earlier decades.

These projections are generally made on the assumption that incomes or expenditure grow in line with the growth rates observed in national accounts data.

You can read more about the interpolation methods used by the World Bank in Chapter 5 of the Poverty and Inequality Platform Methodology Handbook.

Sources and processing

This data is based on the following sources

The Poverty and Inequality Platform (PIP) is an interactive computational tool that offers users quick access to the World Bank’s estimates of poverty, inequality, and shared prosperity. PIP provides a comprehensive view of global, regional, and country-level trends for more than 160 economies around the world.

Retrieved on
March 27, 2024
Citation
This is the citation of the original data obtained from the source, prior to any processing or adaptation by Our World in Data. To cite data downloaded from this page, please use the suggested citation given in Reuse This Work below.
World Bank (2024). Poverty and Inequality Platform (version 20240326_2017 and 20240326_2011) [Data set]. World Bank Group. https://pip.worldbank.org/. Accessed March 27, 2024.

How we process data at Our World in Data

All data and visualizations on Our World in Data rely on data sourced from one or several original data providers. Preparing this original data involves several processing steps. Depending on the data, this can include standardizing country names and world region definitions, converting units, calculating derived indicators such as per capita measures, as well as adding or adapting metadata such as the name or the description given to an indicator.

At the link below you can find a detailed description of the structure of our data pipeline, including links to all the code used to prepare data across Our World in Data.

Read about our data pipeline
Notes on our processing step for this indicator

For most countries in the PIP dataset, estimates relate to either disposable income or consumption, for all available years. A number of countries, however, have a mix of income and consumption data points, with both data types sometimes available for particular years.

In most of our charts, we present the data with some data points dropped in order to present single series for each country. This allows us to make readable visualizations that combine multiple countries and metrics. In choosing which data points to drop, we try to strike a balance between maintaining comparability over time and showing as long a time series as possible. As such, the exact approach varies somewhat across countries.

If you would like to see the original data with all available income and consumption data points shown separately, you can do so in our Poverty Data Explorer. You can also download this data in our complete dataset of the World Bank PIP data.

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  • All data produced by third-party providers and made available by Our World in Data are subject to the license terms from the original providers. Our work would not be possible without the data providers we rely on, so we ask you to always cite them appropriately (see below). This is crucial to allow data providers to continue doing their work, enhancing, maintaining and updating valuable data.
  • All data, visualizations, and code produced by Our World in Data are completely open access under the Creative Commons BY license. You have the permission to use, distribute, and reproduce these in any medium, provided the source and authors are credited.

Citations

How to cite this page

To cite this page overall, including any descriptions, FAQs or explanations of the data authored by Our World in Data, please use the following citation:

“Data Page: Poverty: Share of population living on less than $3.65 a day”, part of the following publication: Joe Hasell, Max Roser, Esteban Ortiz-Ospina and Pablo Arriagada (2022) - “Poverty”. Data adapted from World Bank Poverty and Inequality Platform. Retrieved from https://ourworldindata.org/grapher/share-living-with-less-than-320-int--per-day [online resource]
How to cite this data

In-line citationIf you have limited space (e.g. in data visualizations), you can use this abbreviated in-line citation:

World Bank Poverty and Inequality Platform (2024) – with major processing by Our World in Data

Full citation

World Bank Poverty and Inequality Platform (2024) – with major processing by Our World in Data. “Poverty: Share of population living on less than $3.65 a day – World Bank” [dataset]. World Bank Poverty and Inequality Platform, “World Bank Poverty and Inequality Platform (PIP) 20240326_2017, 20240326_2011” [original data]. Retrieved June 17, 2024 from https://ourworldindata.org/grapher/share-living-with-less-than-320-int--per-day