LAC Equity Lab: Poverty - Poverty Rate

Nearly a quarter of LAC's population lives with less than $5.50 a day (2011 PPP), while just over a third are considered middle class. This dashboard presents the trends in the poverty rate, the poverty gap, and the severity index under various poverty lines for the countries and sub-regions of LAC. The poverty lines include the World Bank’s $1.90-a-day (2011 PPP prices) International Poverty Line, as well as the World Bank’s Upper-Middle-Income and Lower-Middle-Income poverty lines ($5.50-a-day and $3.20-a-day, 2011 PPP, respectively). In addition, one can also choose to visualize the vulnerable and middle class trends. The country data is further subdivided into rural and urban regions, when available.

For the poverty calculations, incomes are aggregated at the household level. The procedure is as follows: all individual incomes from members of a particular household are added together to calculate aggregate income for that household. Then, this aggregate income is divided equally amongst the members of the household. This is known as Per Capita Household Income (PCHI). Next, the PCHI is compared to a given poverty threshold (poverty line), for example, $5.50 per day. Those individuals with income lower than the poverty line are considered poor, while those above are not. This definition implies that all the members of the same household will share the same poverty level. The same procedure is done for other ranges, wherein one selects only those individuals whose income lies in between that range (for example, between $5.50 and $13 per day). Read more about how the poverty measures are calculated here.

Other measures of poverty include the Poverty Gap and Poverty Severity. These are helpful for an analysis of dispersion and depth of poverty. More information is available here.