The paper revisits the issue of poverty-specific purchasing
power parities (PPPs), using the most recent (2011) International
Comparison Program (ICP) results. The World
Bank’s global poverty count uses a common international
poverty line—currently $1.90 at 2011 international
prices—based on the ICP PPPs for consumption. The
use of these PPPs is often criticized for two reasons. First,
the ICP PPPs are based on patterns of aggregate household
consumption, not the consumption of the poor.
Second, the basket of goods and services used for collecting
prices for the ICP is not poverty specific. On the first
issue, using data from 28 African countries, the paper
concludes that the poverty-specific PPPs estimated with
household expenditure survey weights are very similar to
the ICP PPPs. On the second issue, poverty-specific PPPs
were estimated after removing items deemed to be irrelevant
for the poor. The overall effect of removing these
items from consumption PPPs is shown to be negligible.