How to use PovcalNetHome of the World Bank’s Global Poverty Numbers

December 2018 (using data as of September 2018)Prepared by Christoph Lakner and Ruoxuan Wu

Table of Contents

What is PovcalNet? …………………………………………………………………………………………………………...........................2

How to navigate the PovcalNet website? .……………………………………………………….....…………………………………3

How to estimate global poverty? ………………………………………………………………………..…………………………………4

How does it work? – Reference year estimation ………………………………………………………………………….………..7

How does it work? – Survey year estimation ………………………………………………………………………………………14

Updates and publications …………………………………………………………………………………………………………………...20

Appendix …………………………………………………………………………………………………………………………………………….21

1

What Is PovcalNet?

● It is an online analysis tool for global poverty monitoring, developed by the World Bank’s

Development Economics Division (DEC).

● It is the source of the World Bank’s official poverty estimates, which draws on over 1,600

surveys across 164 economies (as of September 2018).

● It allows users to estimate poverty rates for regions, sets of economies or a single economy,

over time and at any poverty line.

● It estimates a range of inequality statistics from household survey data for as many

economies in the world as possible.

2

How to Navigate the PovcalNet Website?

Go to webpage: http://iresearch.worldbank.org/PovcalNet/home.aspx

Check out the

background

papers,

methodology,

and FAQs via

this toolbar.

Click on the three

boxes to estimate

your own poverty

measures and

access inequality

data (more

details below).

3

How to Estimate Global Poverty ? - Reference Year vs Survey Year

● The World Bank’s official regional and global poverty estimates are generated by ‘lining up’

the underlying survey data into reference years.

● In economies where household survey data are not available on an annual basis, growth

rates from national accounts can be used to project consumption or income forward (or

backward) to line up data into reference years, so that poverty can be estimated at the same

point in time across all economies.

● PovcalNet has the following reference years:

1981, 1984, 1987, 1990, 1993, 1996, 1999, 2002, 2005, 2008, 2010, 2011, 2012, 2013,

2015

4

Reference Year vs Survey Year (cont.)

Scenario 1:

For Syria, PovcalNet contains only a

single household survey, conducted in

2004. In this case, the survey mean

from the year 2004 is adjusted forward

and backward to both reference years

2002 & 2005, using the real growth

rate in private consumption per capita

for each year (g).

5

Source: A Measured Approach to Ending Poverty and Boosting Shared Prosperty. 2015. World Bank. Washington, DC. Note: For more details, see Chapter 6.

Reference Year vs Survey Year (cont.)

Scenario 2:

Ethiopia had two household surveys in 2004 and

2010, respectively. To calculate the poverty

headcount in reference year 2005, the survey

means from both surveys are adjusted toward

the reference year, using the real growth rate in

consumption per capita (g) for each year. The

calculation results in two headcounts for the

same reference year, based on the two surveys.

The poverty headcount in 2005 is then calculated

as the weighted average of the two, weighted

according to the number of years between the

survey and reference year.

6

Source: PovcalNet

Survey year

2004

Reference year

2005

Survey year

2010

g04/05 g09/10g08/09g07/08g06/07g05/06

2004

distribution

2010

distribution

h2005 (based on 2004 distribution)

h2005 (based on 2010 distribution)

Illustration of lineup into reference years between

two surveys (example of Ethiopia)

How It Works - Reference Year Estimation

Go to the PovcalNet

homepage & click on the

“World Bank’s regional

aggregation” box in the right

toolbar

7

PovcalNet allows users to

choose any poverty line. The

defaults are three poverty

lines used by the World

Bank (in 2011 USD PPP per

day): The international

poverty line of $1.90. The

higher poverty lines of

$3.20 and $5.50 that are

more typical of national

poverty lines found in

lower- and upper-middle

income economies,

respectively.

Specify any poverty line here (see Example 1)

Reference Year Estimation: Choosing Poverty Lines

8

Survey Coverage:

An economy is ‘covered’

if at least one survey

used in the reference

year estimate was

conducted within two

years of the reference

year. E.g. for 2015,

surveys need to be

conducted between

2013 and 2017.

Regional estimates are

only displayed if survey

coverage is above 40%.

Reference Year Estimation: Understanding the Output Window

Regions: (1) Geographic regions include (a) low- and middle-income economies, and (b) economies eligible for World Bank borrowing or recently graduated economies. (2) All other economies are included in “other high income”.

See here for a full listing of economies by region.

Download .csv file with regional povertyestimates, and underlying lined-up economyestimates. Available for the three defaultpoverty lines. (see Example 2)

9

Example 1

Find out how many people lived on less than $5 a day in Sub-Saharan Africa, using 2015 as the

reference year.

Step 1: select 2015 as reference year

Step 2: set the poverty line to $5.0/day

Click on Sub-Saharan Africa to

see the ‘lined-up’ estimates for

each economy in the region.

Here is the answer: 825 million people

For the world as a whole, 3,138 million people live below $5, which represents 43%

of the world’s population. Using PovcalNet in this way, it can be shown that half of

the world’s population lives on less than $6.17 per day in 2015.

Copy table to clipboard to use in Excel.

10

Example 2

Plot the global poverty trend from 1990 to 2015, using $1.90 per day as the poverty line.

11

First, download the regional summary here

and save it as a CSV file.

Check out what each column means here

Example 2 (cont.)

Second, use filters to keep global poverty

estimates from 1990 to 2015 only.

12

Then, calculate poverty

headcount as (hc × 100)

and number of poor as

(hc × population)

Example 2 (cont.)

Finally, plot the poverty

headcount rate (%) and number

of poor (million) from 1990 to

2015.

In 2015, 10 percent of the global

population were living on less

than the international poverty

line of US$1.90 per person per

day, compared to more than 35

percent in 1990.

13

How It Works - Survey Year Estimation

Go to the PovcalNet

homepage & click on the

“Choose your

economies/aggregates”

box in the right toolbar

14

Overview

15

Survey Year Estimation: Selection of Economies & Survey Coverage

● Use the drop-down lists to specify

selection of economies and survey

coverage

● Economies are listed by regions used

by PocalNet, WB level of income & UN

geographical regions.

● Types of coverage include national,

rural, urban and aggregated

distributions.

● Double click on the economies to

select. Selection will show up in the

right box. Then click “Continue>>”.

Selecting this box reverts to reference year estimation, at any poverty line. Use this for aggregating over a user-specified group of economies (select the relevant economies on this page).

Import a list of 3-letter economy codes (useful for selecting a user-specified group of economies). See Appendix for the 3-letter codes used by PovcalNet.

16

Example 3

Specify poverty line here

(per day, in 2011 PPP

USD). Default value is

$1.90. Poverty lines can

differ by economy.

Set the same poverty line across

economies, by entering for the first

economy and choose ‘set to all’.

Find out the latest (survey-year) poverty headcount rates (at $1.9 per day in 2011 PPP) and Gini

index in Bangladesh and Ethiopia.

Specify PPP exchange rate here. Default is 2011 PPP, as explained here.

This can be used to compute estimates at alternative PPP exchange rates.

Select single years, or all.

Output displayed in flat or distribution table

17

Example 3 (cont.) - Flat Table Output

Answer to Q1: 14.8% of the population in Bangladesh and 26.7% in Ethiopia live below $1.90 per day in 2015-2016.

Answer to Q2: Gini index is 32.4 in Bangladesh and 39.1 in Ethiopia.

Clicking on economy name opens a window with information about survey name etc.:

Data type is defined as: • c: unit-record consumption data• i: unit-record income data• C: grouped consumption data• I: grouped income data

Detailed output provides information about the estimation steps (mostly relevant for grouped data).

18

Example 3 (cont.) - Distribution Table Output

The output can also be

displayed in the distribution

table, which provides more

details on the distribution:

• Shows income or

consumption shares of

the decile groups.

• Shows average income or

consumption of the

bottom X%, e.g. it shows

the average consumption

of the bottom 40%.

19

To Learn More about the Updates & Publications...

Check out the ‘What is new’ page here: http://iresearch.worldbank.org/PovcalNet/WhatIsNew.aspx

The Global Poverty Monitoring Technical Notes provide more details on the methodology.

Available here:

http://iresearch.worldbank.org/PovcalNet/publications.aspx

20

Appendix 1: List of 3-letter economy-codes used in PovcalNet

21

Code Economy Code Economy Code Economy Code Economy Code Economy Code Economy

ALB Albania CHN China GRC Greece LBN Lebanon MKD North Macedonia SDN Sudan

DZA Algeria COL Colombia GTM Guatemala LSO Lesotho NOR Norway SUR Suriname

AGO Angola COM Comoros GIN Guinea LBR Liberia PAK Pakistan SWE Sweden

ARG Argentina COD Congo, Democratic Republic of GNB Guinea-Bissau LTU Lithuania PAN Panama CHE Switzerland

ARM Armenia COG Congo, Republic of GUY Guyana LUX Luxembourg PNG Papua New Guinea SYR Syrian Arab Republic

AUS Australia CRI Costa Rica HTI Haiti MDG Madagascar PRY Paraguay TJK Tajikistan

AUT Austria CIV Cote d'Ivoire HND Honduras MWI Malawi PER Peru TZA Tanzania

AZE Azerbaijan HRV Croatia HUN Hungary MYS Malaysia PHL Philippines THA Thailand

BGD Bangladesh CYP Cyprus ISL Iceland MDV Maldives POL Poland TLS Timor-Leste

BLR Belarus CZE Czech Republic IND India MLI Mali PRT Portugal TGO Togo

BEL Belgium DNK Denmark IDN Indonesia MLT Malta ROU Romania TON Tonga

BLZ Belize DJI Djibouti IRN Iran, Islamic Republic of MRT Mauritania RUS Russian Federation TTO Trinidad and Tobago

BEN Benin DOM Dominican Republic IRQ Iraq MUS Mauritius RWA Rwanda TUN Tunisia

BTN Bhutan ECU Ecuador IRL Ireland MEX Mexico WSM Samoa TUR Turkey

BOL Bolivia EGY Egypt, Arab Republic of ISR Israel FSM Micronesia, Federated States of STP Sao Tome and Principe TKM Turkmenistan

BIH Bosnia and Herzegovina SLV El Salvador ITA Italy MDA Moldova SEN Senegal TUV Tuvalu

BWA Botswana EST Estonia JAM Jamaica MNG Mongolia SRB Serbia UGA Uganda

BRA Brazil SWZ Eswatini JPN Japan MNE Montenegro SYC Seychelles UKR Ukraine

BGR Bulgaria ETH Ethiopia JOR Jordan MAR Morocco SLE Sierra Leone GBR United Kingdom

BFA Burkina Faso FJI Fiji KAZ Kazakhstan MOZ Mozambique SVK Slovak Republic USA United States

BDI Burundi FIN Finland KEN Kenya MMR Myanmar SVN Slovenia URY Uruguay

CPV Cabo Verde FRA France KIR Kiribati NAM Namibia SLB Solomon Islands UZB Uzbekistan

CMR Cameroon GAB Gabon KOR Korea, Republic of NPL Nepal ZAF South Africa VUT Vanuatu

CAN Canada GMB Gambia, The XKX Kosovo NLD Netherlands SSD South Sudan VEN Venezuela, Republica Bolivariana de

CAF Central African Republic GEO Georgia KGZ Kyrgyz Republic NIC Nicaragua ESP Spain VNM Vietnam

TCD Chad DEU Germany LAO Lao People's Democratic Republic NER Niger LKA Sri Lanka PSE West Bank and Gaza

CHL Chile GHA Ghana LVA Latvia NGA Nigeria LCA St. Lucia YEM Yemen, Republic of

ZMB Zambia

ZWE Zimbabwe

Appendix 2: PovcalNet Excel Output Headers

22

Header Explanation Header Explanation

requestYear Reference year isInterpolated [=1] if reference year estimate is interpolated

regionTitle Region title useMicroData [=1] if using micro data, [=0] if grouped data

regionCID, RegionCode Region three-letter code CountryCode, CountryName Economy name and three-letter code

povertyLine Poverty line CoverageType Geographic coverage of data: National, Urban,

mean Mean income or Rural or Aggregated (combining urban and rural)

consumption per month DataYear Survey year used in reference year estimation

hc, HeadCount Poverty headcount DataType [=Y] Income data, [=X] Consumption expenditure

pg, PovGap Poverty gap PPP PPP exchange rate used

p2, PovGapSqr Squared poverty gap Watts Watts index

population Population in reference Gini Gini index

year Median Median income or consumption per month

pr.mld Mean log deviation

ReqYearPopulation Population in reference year (used in regional

and global aggregation)

Decile1 - Decile10 Decile income or consumption shares

Headers used in regional and economies table Additional headers used in economies table