How to Monitor Poverty for the Millennium Development Goals.pdf

Journal of Human Development Vol. 4, No. 3, November 2003 How to Monitor Poverty for the Millennium Development Goals ANGUS DEATON Angus Deaton is Dwight D. Eisenhower Professor of Economics and International Affairs at Princeton’s Woodrow Wilson School and Department 9 of Economics 0 0 2 y r a u n Abstract I consider two issues concerning how to monitor global poverty a J 0 for the Millennium Development Goals, the selection of poverty lines, and 3 6 the data sources for monitoring poverty over time. I discuss the choice of a 1 : 9 single international line, converted using purchasing power parity (PPP) 1 : exchange rates, versus the use of country-specific poverty lines. I note the t A ] difficulties in constructing PPP exchange rates but argue in favor of a single y t i international line, converted at PPP rates, which would be regularly updated s r e using domestic price indexes. Re-basing, using updated PPP rates, would be v i n U done infrequently. For example, if the global poverty numbers were estimated n o annually, the PPP rates might be updated once a decade. In any case, it is t e c important that the poverty estimates be calculated much more frequently n i r P