Indicator 1.20 Poverty gap at $8.30 a day (2021 PPP) (%) - proxy indicator

Poverty gap at $8.30 a day (2021 PPP) is the mean shortfall in income or consumption from the poverty line $8.30 a day (counting the nonpoor as having zero shortfall), expressed as a percentage of the poverty line. This measure reflects both the depth and the incidence of poverty.

Monitoring poverty is important on the global development agenda as well as on the national development agenda of many countries. The poverty gap measures the depth of poverty—that is, how far below the upper-middle-income poverty line the poor are living. The poverty gap measure is used to estimate the total value of monetary transfers that could lift the poor out of poverty, assuming poverty is transitory and there are no administrative costs of transfers.

International comparisons of poverty estimates entail both conceptual and practical problems. Countries have different definitions of poverty, and consistent comparisons across countries can be difficult. Local poverty lines tend to have higher purchasing power in rich countries, where more generous standards are used, than in poor countries. As differences in the cost of living across the world evolve, the international poverty line has to be periodically updated using new PPP price data to reflect these changes. The last change was in September 2022, when we adopted $3.00 as the international poverty line using the 2021 PPP. As a result of revisions in PPP exchange rates, poverty rates for individual countries cannot be compared with poverty rates reported in earlier editions. The statistics reported here are based on consumption data or, when unavailable, on income surveys.

The long-term goal is to assess and gradually reduce the depth of poverty in order to raise the population living below the $8.30 per day threshold above that threshold.