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One of the mysteries of development economics is why more people in subsistence agriculture don't migrate to cities where incomes are much, much higher. New data suggests one answer: when they move, their incomes may not go up as much as we thought.
The purchasing-power rates (PPPs) from the 2011 International Comparison Program (ICP) suggest lower inequality and poverty in the world than was thought based on prior ICP data. However, there are some continuing and (as yet) poorly resolved concerns about the data revisions implied by the 2011 ICP.
A few days ago Bill Gates released his annual letter to the world, opening with a discussion of how Gates-funded agricultural research can help Tanzanian farmers. Coincidentally, before coming to CGD I did some agricultural research in Tanzania myself -- funded in part by the Bill and Melinda Gates Foundation -- so I was eager to compare notes. Gates’ letter is so optimistic about agricultural innovation lifting Tanzanian farmers out of poverty, it feels almost impolite to point out that the main sou