Working Paper 2015-369
Traditional assessments of economic growth and progress against poverty put little or no weight on increasing the standard of living of the poorest—raising the floor for permanent consumption above the biological minimum. Yet raising the floor is often emphasized by policy makers, moral philosophers and social choice theorists. To address this deficiency, the paper defines and measures the expected value of the floor as a weighted mean of observed consumptions for the poorest stratum. Using data for the developing world over 1981-2011, the estimated floor is about half the $1.25 a day poverty line. Economic growth and social policies have delivered only modest progress in raising the floor, despite progress in reducing the number living near the floor.
Authors: Martin Ravallion.