Measuring Poverty and Empowerment: Global Benchmarks and Economic Thresholds
- Fundação RESET
- Mar 12
- 2 min read
Understanding poverty and economic empowerment requires precise benchmarks to measure household spending and basic needs. The extreme poverty threshold is often based on national expenditure surveys, while the empowerment line considers wages and cost-of-living data. These metrics are crucial for policymakers, development organizations, and researchers to assess economic mobility and the global middle-class transition. This report synthesizes key data sources that inform these economic thresholds, including India’s National Sample Survey, WageIndicator Foundation data, and research by leading economists.
Key Findings
The distribution of extreme poverty spending is derived from India’s 2011–12 National Sample Survey of Household Consumer Expenditure, which provides a detailed breakdown of household expenditures across income deciles. The first decile, representing the lowest 10% of households, forms the basis for setting the extreme poverty threshold. These figures help quantify the minimum level of spending necessary for survival and inform global poverty assessments.
The empowerment line, set at $12 per day in 2017 PPP (Purchasing Power Parity) terms, is based on WageIndicator Foundation data and considers the costs required to meet basic needs. This threshold represents a global minimum income level that allows individuals to afford essential services such as food, healthcare, education, and housing, enabling economic security beyond mere subsistence. The methodology accounts for wage levels and living costs in different regions, offering a more comprehensive perspective on poverty reduction efforts.
Studies by Homi Kharas (2010) and Surjit Bhalla (2007) have been influential in defining the global middle class. Kharas originally set the middle-class threshold at $10 per day in 2005 PPP, later revised to $12 per day in 2017 PPP. This threshold distinguishes individuals transitioning from economic vulnerability to a stable middle-class status. Such benchmarks are vital for assessing income distribution trends and guiding policies aimed at fostering inclusive economic growth.
Defining poverty and empowerment levels is essential for developing effective policies that address economic disparity. The extreme poverty benchmark, informed by national expenditure data, highlights the minimum survival requirements, while the empowerment line sets a realistic income floor for achieving economic stability. The global middle-class threshold further helps track progress in reducing economic vulnerability. These insights guide global development strategies, emphasizing the need for inclusive growth policies that promote sustainable economic mobility.
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The SDG'sG's, also known as the Global Goals, were adopted by the United Nations in 2015 as a universal call to action to end poverty, protect the planet, and ensure that by 2030 all people enjoy peace and prosperity.
