World poverty, another look

• Published in: Environment, development and sustainability Vol. 13; no. 4; pp. 677 - 683
• Main Author: L Ruoff, Arthur
• Format: Journal Article
• Language: English
• Published: Dordrecht Springer Netherlands 01-08-2011; Springer Nature B.V
• Subjects: Banks; Central banks; Cereals; Consumer Price Index; Copper; Dollar; Earth and Environmental Science; Ecology; Economic conditions; Economic Geology; Economic Growth; Environment; Environmental Economics; Environmental Management; GNP; Gross National Product; Growth rate; Labor; Mathematical analysis; Per capita income; Population; Poverty; Statistics; Studies; Sustainability; Sustainable Development; World Bank; World population; USA; Poverty line; Consumer price index
• ISSN: 1387-585X; 1573-2975
• DOI: 10.1007/s10668-011-9283-y

The World Bank used the Consumer Price Index (CPI) to calculate changes in the world poverty level (measured in U.S. dollars) prior to 1982. In 1983, the U.S. Bureau of Labor Statistics (BLS) replaced the CPI with several indices including CPI-W which was then adopted by the World Bank. This caused the inflated rate of the U.S. dollars and the percentage of the world population in poverty to be dramatically underestimated. This new incorrect procedure gives 25% (1.5 million) below the poverty line in 2005, while the more appropriate procedure (described herein) gives 52% (3.3 million in 2005). The rapid rise of the poverty line (using the preferable CPI) starting in 1987 occurred at nearly the same time as the peak in per capita annual cereal production.