Publication:
Measuring Poverty in Latin America and the Caribbean: Methodological Considerations When Estimating an Empirical Regional Poverty Line

Abstract
This paper contributes to the methodological literature on the estimation of poverty lines for country poverty comparisons in Latin America and the Caribbean. The paper exploits a unique, comprehensive data set of 86 up-to-date urban official extreme and moderate poverty lines across 18 countries in Latin America and the Caribbean, as well as the recent values of the national purchasing power parity conversion factors from the 2011 International Comparison Program and a set of harmonized household surveys that are part of the Socio-Economic Database for Latin America and the Caribbean project. Because of the dispersion of country-specific poverty lines, the paper concludes that the value of a regional poverty line largely depends on the selected aggregation method, which ends up having a direct impact on the estimation of regional extreme and moderate poverty headcounts.
Link to Data Set
Citation
Castaneda, R. Andres; Gasparini, Leonardo; Garriga, Santiago; Lucchetti, Leonardo R.; Valderrama, Daniel. 2016. Measuring Poverty in Latin America and the Caribbean: Methodological Considerations When Estimating an Empirical Regional Poverty Line. Policy Research Working Paper;No. 7621. © World Bank. http://hdl.handle.net/10986/24163 License: CC BY 3.0 IGO.
Associated URLs
Associated content
Report Series
Report Series
Other publications in this report series
  • Publication
    The Macroeconomic Implications of Climate Change Impacts and Adaptation Options
    (Washington, DC: World Bank, 2025-05-29) Abalo, Kodzovi; Boehlert, Brent; Bui, Thanh; Burns, Andrew; Castillo, Diego; Chewpreecha, Unnada; Haider, Alexander; Hallegatte, Stephane; Jooste, Charl; McIsaac, Florent; Ruberl, Heather; Smet, Kim; Strzepek, Ken
    Estimating the macroeconomic implications of climate change impacts and adaptation options is a topic of intense research. This paper presents a framework in the World Bank's macrostructural model to assess climate-related damages. This approach has been used in many Country Climate and Development Reports, a World Bank diagnostic that identifies priorities to ensure continued development in spite of climate change and climate policy objectives. The methodology captures a set of impact channels through which climate change affects the economy by (1) connecting a set of biophysical models to the macroeconomic model and (2) exploring a set of development and climate scenarios. The paper summarizes the results for five countries, highlighting the sources and magnitudes of their vulnerability --- with estimated gross domestic product losses in 2050 exceeding 10 percent of gross domestic product in some countries and scenarios, although only a small set of impact channels is included. The paper also presents estimates of the macroeconomic gains from sector-level adaptation interventions, considering their upfront costs and avoided climate impacts and finding significant net gross domestic product gains from adaptation opportunities identified in the Country Climate and Development Reports. Finally, the paper discusses the limits of current modeling approaches, and their complementarity with empirical approaches based on historical data series. The integrated modeling approach proposed in this paper can inform policymakers as they make proactive decisions on climate change adaptation and resilience.
  • Publication
    South Africa’s Fragmented Cities: The Unequal Burden of Labor Market Frictions
    (Washington, DC: World Bank, 2026-01-08) Baez, Javier E.; Kshirsagar, Varun
    Using high-resolution administrative, census, and satellite data, this paper shows that South African cities are characterized by spatial mismatches between where people live and where jobs are located, relative to 20 global peers. Areas within 5 kilometers of commercial centers have 9,300 fewer residents per square kilometer than expected, which is 60 percent below the global median. Poor, dense neighborhoods are most affected. In Johannesburg, a 10-percentile increase in distance from the nearest business hub corresponds to a 3.7-percentile drop in asset wealth (a proxy of household wellbeing) and 4.9-percentile drop in employment. In Cape Town, the declines are 4.0 and 3.7 percentiles, respectively. Employment is 87 percent lower in the poorest decile than the richest in Johannesburg and 61 percent lower in Cape Town. These findings suggest that South Africa’s spatial organization of people and economic activity constrains agglomeration and reinforces inequality. This methodology provides a scalable and standardized data-driven framework to analyze spatial accessibility and agglomeration frictions in complex, data-constrained urban systems.
  • Publication
    The Evolution of Local Participatory Democracy in Nepal
    (Washington, DC: World Bank, 2025-11-05) Bhusal, Thaneshwar; Breen, Michael G; Rao, Vijayendra
    Nepal is, according to its constitution, among the world’s most decentralized countries, with a long and complex tradition of local-level public participation. This paper traces the evolution of Nepal’s modern participatory institutions, examining the extent to which they are “induced” by external interventions versus being “organically” rooted in indigenous practices. The paper identifies three broad phases: an initial focus on participation in project implementation; a subsequent phase that expanded citizen engagement; and a third phase of citizen empowerment, culminating in the 2015 federal constitution, which granted unprecedented local autonomy. The analysis yields five key findings. First, over the past 50 years, successive reforms have progressively expanded opportunities for citizens to influence local decision-making. Second, these reforms have integrated traditional participatory mechanisms into formal institutions of local government. Third, although central-level initiatives exist, most participatory platforms continue to operate at the local level. Fourth, the federal constitution has created a new landscape of local democracy, embedding autonomy and accountability. Fifth, although they are still valued in many ethnic and territorial communities, traditional participatory practices are gradually disappearing. The paper concludes by offering policy recommendations to help donor agencies and governments strengthen Nepal’s democratic trajectory. It argues that effective interventions should build on Nepal’s deep participatory traditions while recognizing the constitutional reality of far-reaching local autonomy.
  • Publication
    Institutional Capacity for Policy Implementation: An Analytical Framework
    (Washington, DC: World Bank, 2026-01-07) Kim, Galileu; Kumar, Tanu; Ramalho, Rita; Russell, Stuart
    State capacity is an important prerequisite for policy implementation, yet at the country level it is difficult to measure, assess, and reform. This paper proposes a focus on institutional capacity: the ability of public institutions to implement the specific policy mandates for which they are responsible. Based on a review of existing literature, the paper defines the different dimensions that compose institutional capacity and groups them into two cross-cutting categories: organizational dimensions (personnel, financial resources, information systems, and management practices) and governance dimensions (transparency, independence, and accountability). The paper proposes measures for organizational and governance dimensions using existing data, shows intra-institutional variation of these measures within countries, and discusses how new data could be collected for better measurement of these concepts. Finally, the paper illustrates how the framework can be used to diagnose the sources of common problems related to weak policy implementation.
  • Publication
    Closing the Gender Gap in Entrepreneurship: Overcoming Challenges in Law and Practice for Female Entrepreneurs
    (Washington, DC: World Bank, 2026-01-07) Behr, Daniela M.; Xi, Yue
    Despite significant strides toward gender equality, women around the world continue to encounter systemic obstacles that hinder their entrepreneurial success. This paper systematically reviews the literature on the barriers female entrepreneurs face and the solutions proposed to overcome these challenges. It discusses institutional factors, financial factors, human capital factors, and social and cultural factors. The literature overview is complemented by a series of stylized facts that illustrate how overcoming some of these existing barriers is correlated with improved women’s entrepreneurship and female labor force participation, drawing on the World Bank’s Women, Business and the Law database as well as the World Bank’s Enterprise Surveys. The findings underscore the need for creating an enabling environment where women can thrive as entrepreneurs.
Journal
Journal Volume
Journal Issue

Related items

Showing items related by metadata.

  • Publication
    The Developing World is Poorer Than We Thought, but No Less Successful in the Fight Against Poverty
    (Washington, DC: World Bank, 2008-08) Chen, Shaohua; Ravallion, Martin
    The paper presents a major overhaul to the World Bank's past estimates of global poverty, incorporating new and better data. Extreme poverty-as judged by what "poverty" means in the world's poorest countries-is found to be more pervasive than we thought. Yet the data also provide robust evidence of continually declining poverty incidence and depth since the early 1980s. For 2005 we estimate that 1.4 billion people, or one quarter of the population of the developing world, lived below our international line of $1.25 a day in 2005 prices; 25 years earlier there were 1.9 billion poor, or one half of the population. Progress was uneven across regions. The poverty rate in East Asia fell from almost 80 percent to under 20 percent over this period. By contrast it stayed at around 50 percent in Sub-Saharan Africa, though with signs of progress since the mid 1990s. Because of lags in survey data availability, these estimates do not yet reflect the sharp rise in food prices since 2005.
  • Publication
    Poverty Reduction without Economic Growth? Explaining Brazil's Poverty Dynamics, 1985-2004
    (World Bank, Washington, DC, 2007-12) Leite, Phillippe G.; Ferreira, Francisco H.G.; Ravallion, Martin
    Brazil's slow pace of poverty reduction over the last two decades reflects both low growth and a low growth elasticity of poverty reduction. Using GDP data disaggregated by state and sector for a twenty-year period, this paper finds considerable variation in the poverty-reducing effectiveness of growth-across sectors, across space, and over time. Growth in the services sector was substantially more poverty-reducing than was growth in either agriculture or industry. Growth in industry had very different effects on poverty across different states and its impact varied with initial conditions related to human development and worker empowerment. The determinants of poverty reduction changed around 1994: positive growth rates and a greater (absolute) elasticity with respect to agricultural growth contributed to faster poverty reduction. But because there was so little of it, economic growth played a relatively small role in accounting for Brazil's poverty reduction between 1985 and 2004. The taming of hyperinflation (in 1994) and substantial expansions in social security and social assistance transfers, beginning in 1988, accounted for a larger share of the overall reduction in poverty.
  • Publication
    Poverty Alleviation in Jordan : Lessons for the Future
    (Washington, DC: World Bank, 2001-06) Shaban, Radwan A.; Abu-Ghaida, Dina; Al-Naimat, Abdel-Salam
    This report draws lessons for improving the policy design of poverty alleviation schemes in Jordan. The conclusions herein are based on analyses of trends in consumption poverty in Jordan and assessment of the impact of government programs (including food subsidies and cash transfers) on poverty alleviation in the 1990s. Poverty declined between 1992 and 1997 because inequality declined. Government programs, especially those targeted to the poor like the National Aid Fund, contributed to poverty alleviation. However, poverty continues to be a major policy challenge for Jordan: the poor and near-poor remain vulnerable as a result of the shallowness of poverty in Jordan (many people are concentrated close to the poverty line) and the adverse effects of potential shocks. The report concludes the following: 1) sustainable poverty reduction requires resumption and sustainability of growth; 2) there is a need for a policy response to the vulnerability of the poor and near-poor to economic shocks; 3) the capacity of the National Aid Fund (NAF) needs to be significantly enhanced; and 4) continued priority needs to be placed on human development policies, particularly those affecting the poor.
  • Publication
    Azerbaijan : Living Conditions Assessment Report
    (World Bank, 2010-03-01) World Bank
    Azerbaijan saw a substantial reduction in poverty during the 2000s, owing to significant economic growth and policies and programs that improved the distribution of wealth. Seizing the opportunity afforded by the oil boom, Azerbaijan initiated large public sector investment programs and supportive policies to increase wages and social protection transfers to the population, and institutional reforms aimed at modernizing the economy. These efforts translated into double-digit growth and an impressive reduction in poverty. The report underscores that the government's targeted social assistance program has been successful in channeling public transfers to the most needy. On the other hand, high dependence on oil revenues, compounded by the current global economic crisis, presents challenges to maintaining growth and could jeopardize the gains made in poverty reduction. Moreover, while Azerbaijan has made significant progress in building capacity to redistribute the benefits of growth, significant challenges remain in developing the human capital of the population to participate actively in future growth and to close the productivity gap with its comparators in the post crisis world.
  • Publication
    Welfare Dynamics with Synthetic Panels
    (2016-03-10) Dang, Hai-Anh H.; Ianchovichina, Elena
    This paper studies welfare dynamics, especially changes associated with middle-class status in countries in the Middle East and North Africa, before and after the Arab Spring transitions, using objective and subjective welfare measures. Absent panel data, the analysis employs state-of-the-art synthetic panel techniques using repeated cross sections of expenditure data from household surveys and subjective well-being data from value surveys, which were conducted during the 2000s and the Arab Spring period. The objective welfare dynamics indicate mixed trends. About half the poor in the 2000s moved out of poverty by the end of the decade, but chronic poverty remained high; upward mobility was strong in Syria and Tunisia, but downward mobility was pronounced in Yemen and Egypt. Subjective well-being dynamics suggest negative developments in most countries during the Arab Spring transitions. Low education achievement, informal worker status, and rural residency are positively associated with lower than average chances for upward mobility, and greater than average chances for downward mobility according to both types of welfare measures.

Users also downloaded

Showing related downloaded files

  • Publication
    Digital Africa
    (Washington, DC: World Bank, 2023-03-13) Begazo, Tania; Dutz, Mark Andrew; Blimpo, Moussa
    All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.
  • Publication
    Direct and Indirect Impacts of Transport Mobility on Access to Jobs: Evidence from South Africa
    (Washington, DC: World Bank, 2025-11-12) Iimi, Atsushi
    Access to jobs is essential for economic growth. In Africa, unemployment rates are notably high. This paper reexamines the relationship between transport mobility and labor market outcomes, with a particular focus on the direct and indirect effects of transport connectivity. As predicted by theory, wages are influenced by the level of commuting deterrence. Generally, higher earnings are associated with longer commute times and/or higher commuting costs. Local accessibility is also important, especially for individuals with time constraints. Both direct and indirect impacts are found to be significant in South Africa, where job accessibility has been challenging since the end of apartheid. For the direct impact, the wage elasticity associated with commuting costs is significant. Returns on commute are particularly high for women. Local accessibility to socioeconomic facilities, such as shops and health services, is also found to have a significant impact, consistent with the concept of mobility of care. To enhance employment, therefore, it is crucial to connect people not only to job locations but also to various socioeconomic points of interest, such as markets and hospitals, in an integrated manner. This integration will enable individuals to spend more time working and commuting longer distances.
  • Publication
    Taxes, Spending, and Equity: International Patterns and Lessons for Developing Countries
    (Washington, DC: World Bank, 2025-11-17) Wai-Poi, Matthew; Sosa, Mariano; Bachas, Pierre
    Taxes and public spending underpin the basic administration of government and finance the human capital and infrastructure investments needed for economic growth. They can also have a significant and immediate impact on poverty and inequality. The question of how public finance can support longer-term growth objectives while promoting equity has become even more important in recent years, given the high fiscal deficits and debt levels most countries emerged with in the aftermath of the COVID-19 pandemic. These included the increasing cost of debt and the need to restart environmentally sustainable growth while helping households address the learning losses and other social scars caused by the pandemic. This paper examines the global evidence on which households pay which taxes and who benefits from what spending, and critically, the net effect on different households across the income distribution. The aim is to identify the patterns and lessons that emerge for designing progressive fiscal policies. A global dataset of 96 countries is assembled, spanning all regions of the world and all national income levels, grounded in the Commitment to Equity (CEQ) approach to fiscal incidence.
  • Publication
    The State of Identification Systems in Africa
    (World Bank, Washington, DC, 2017) World Bank Group
    The global landscape of identification (ID) is changing rapidly. Technology is making it cheaper to identify people accurately, while the opportunities of the digital era are making it more important to be able to prove one’s identity. The role of ID systems has become essential in areas ranging from financial inclusion, social protection, migration, and even coping with natural disasters. Based on the World Bank’s identification for development (ID4D) program’s database, more than 40 percent of those lacking IDs in the world live in Africa. For the first time, the World Bank is planning to provide financial support and technical assistance to ID systems in Africa; this is an area in which it has had marginal involvement until now. The knowledge base related to ID systems in Africa has expanded dramatically. Applying a standardized assessment approach, the World Bank has financed more than 20 country reports and produced a synthesis report covering 17 of them. This publication draws from those reports as well as primary and secondary sources to provide a brief sketch of the foundational ID system in 48 African countries. The brief also confirms that the gaps in the legal and institutional environment that were found in the subset of countries covered in the synthesis report are representative of the wider African context. This volume represents a very small step toward increasing the understanding of the rapidly changing landscape of ID systems in Africa.
  • Publication
    Croatia : Railway Policy Note
    (Zagreb: World Bank, 2013-06) World Bank
    The note first presents a brief overview of the Croatian railway sector, listing the main challenges that it is currently facing, and identifying the main areas of intervention for the development of a financially sustainable sector, which should guide any thorough sector reform program in the long-run. Sector governance challenges are presented, outlining the sector's high dependency on state support, its organizational weaknesses, and its market distortions. This is followed by more detailed historical analysis of Croatian Railways (HZ) holding's performance, corporate governance issues, and investment needs. The operational and financial performance of each major line of business of HZ holding is assessed, highlighting their competitiveness issues. Following the adoption of the restructuring plan, the Bank team used a global financial model to identify measures that might be necessary to make the system sustainable in the long-run. The team considered a range of optimistic and pessimistic scenarios, which may call for additional measures to be taken to complement the measures laid out in the restructuring plan. The note concludes with the presentation of these scenarios, the targets that should be fixed to business lines in cost-cutting, and actions that the Government might take to ensure that the system is sustainable and to secure the successful integration of the Croatian railway sector into the European Union (EU). It highlights the choices that remain open to the Government in terms of sector spending and financial structuring of its support in a constrained fiscal environment.