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Purchasing power parities and the Dollar-A-Day approach: An unstable relationship

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1_s2.0_S0165176521002512_main.pdf (331.05 KB)

Publication date

2021-09

Authors

Moatsos, MichailISNI 0000000492798784
Lazopoulos, Achillefs

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DOI

https://doi.org/10.1016/j.econlet.2021.109974

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Article

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Abstract

We show that the Dollar-A-Day methodology in global poverty measurement provides inconsistent International Poverty Line (iPL) solutions when a complete set of consistency criteria in the iPL definition is used. This article illustrates that minor fluctuations in purchasing power parity exchange rates can yield inconsistent iPLs. We find a rate of inconsistency of 46.1% and we conclude that this is a worrisome attribute of the method.

Keywords

Dollar-A-Day, Error, Global poverty, Inconsistency, Monte Carlo, PPP, Finance, Economics and Econometrics, SDG 1 - No Poverty

Citation

Moatsos, M & Lazopoulos, A 2021, 'Purchasing power parities and the Dollar-A-Day approach: An unstable relationship', Economics Letters, vol. 206, 109974, pp. 1-4. https://doi.org/10.1016/j.econlet.2021.109974

URI

http://hdl.handle.net/1874/416166