Has Extreme Poverty Really Decreased? New Analysis Reveals Surprising Facts: The Graphs Show a Downward Trend, But What About the Dining Table? — New Norms Surrounding Extreme Poverty

"Has Extreme Poverty Really Decreased?"—A Different World Emerges When Measured by "Basic Necessities"

"Extreme poverty, which affected about 47% of the world's population in 1981, has now dropped to about 10%." The World Bank's statistics have been telling the story of this "unprecedented progress in human history" over the past 40 years. However, this "good news" heavily depends on the method of measurement—an objection that was revisited in an analysis published on Phys.org on August 18, 2025. The authors, Jason Hickel, Dylan Sullivan, and Mikhail Moatsos, criticize the international poverty line of about $3 a day (2021 prices) calculated using purchasing power parity (PPP), arguing that it does not adequately reflect whether it can buy "the specific necessities for survival" in each country. Instead, they propose that when the world is reassessed using a "Basic Needs Poverty Line (BNPL)" based on the prices of essentials like food, housing, clothing, and fuel, a different picture emerges. Phys.org

BNPL from 1980 to 2011: Minimal Improvement in Rates, Increase in Numbers

According to BNPL estimates, the extreme poverty rate from 1980 to 2011 only dropped from 23% to 17%, a mere 6-point decrease. Moreover, the "number" of people in poverty increased from 1.01 billion to 1.2 billion. This sharply contradicts the narrative of a sharp decline based on PPP. Phys.orgLSE Blog

The Lost Two Decades? Extreme Poverty Expanded During the Reform Era

The article points out that during the 1980s and 1990s, when market reforms (so-called structural adjustments) were advancing in many developing regions, there was a period when extreme poverty, as seen through BNPL, actually expanded. The impact of policy shifts on the prices and availability of necessities was significant, and depending on the combination of wages, prices, and public services, the substance of the poverty line could fluctuate—this is the message conveyed. Phys.org

How to View Post-2011: Worsening Food Insecurity

While comprehensive global data for BNPL stops at 2011, according to surveys by the FAO (Food and Agriculture Organization of the United Nations), "moderate or severe food insecurity" rose from 21% to 30% and "severe food insecurity" increased from 7.7% to 11.3% between 2014 and 2022. Considering that food is central to basic necessities, it can be inferred that the reality of the late 2010s to early 2020s was at least not "smooth sailing." Phys.orgFAO Open Knowledge

Was the "Halving Goal" Really Achieved?

The United Nations Millennium Development Goals (MDGs) aimed to halve the extreme poverty rate from 1990 to 2015. While the narrative of achievement is told based on PPP, trends in BNPL and food insecurity suggest a "high possibility of non-achievement," according to the analysis. This is a prime example of how differences in indicators can influence the outcomes of policy evaluations. Phys.org

Why Are the Numbers So Different: PPP vs. BNPL

• International Poverty Line Based on PPP
  Using PPP to equalize general price levels across countries, a uniform "equivalent of $2.15 to $3 a day" is applied, and poverty rates are derived from household expenditure surveys. While convenient for long-term comparisons, it has the weakness of varying by country, region, and period as to "whether that amount can truly buy 'what is necessary to live.'" VoxThe Guardian

• BNPL (Basic Needs Poverty Line)
  In each country, the cost of a basket of minimum calories and nutrition, as well as essentials like food, clothing, housing, and fuel, is calculated at actual prices, and those who cannot meet this cost are defined as in extreme poverty. While constructing the cost basket is labor-intensive, it has a sensitivity closer to the "reality of survival." jussemper.org

The difference in these frameworks paints the same world in entirely different colors. PPP shows a "dramatic decrease in rates," while BNPL shows "limited improvement in rates, with numbers stable or increasing." It's not so much about which is "correct," but rather the questions are different. The former looks at "the minimum line in terms of purchasing power of money," while the latter considers "whether it reaches the actual necessities." Since the definition of poverty involves value judgments, it is essential to disclose the premises of indicators in policy discussions.

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