Toward Better Global Poverty Measures - Working Paper 417

While much progress has been made over the last 25 years in measuring global poverty, there are a number of challenges ahead. The paper discusses three sets of problems: (i) how to allow for social effects on welfare, recognizing the identification issues involved; (ii) the need to monitor progress in raising the consumption floor above its biological level, in addition to counting the number of people living near the floor; and (iii) addressing the longstanding concerns about prevailing approaches to making inter-country comparisons of price levels facing poor people. Some suggestions are offered for operational solutions, building on past research.