Global Poverty Line in U.S. Dollars?

September 13, 2024 7:54 PM

The World Bank places the Global Poverty Line at $2.15 per day, in Purchasing Power Parity. How much is that in U.S. dollars? If someone were to receive an annual amount of $2.15 per day in PPP, how much would that cost in USD?
posted by NotLost to Work & Money (7 answers total)

$2.15 : Why are some series shown in Purchasing Power Parity (PPP) terms?

Data shown in PPP terms have been converted from national currency units to U.S. dollars using purchasing power parity conversion factors instead of market exchange rates. Exchange rates do not always reflect international differences in relative prices. PPPs are derived from international price comparisons. Therefore, they provide a standard measure allowing comparison of real volumes between countries.

By establishing purchasing power equivalence, where one dollar purchases the same quantity of goods and services in all countries, PPP conversions allow cross-country comparisons of economic aggregates on the basis of physical levels of output, free of price and exchange rate distortions.
posted by Iris Gambol at 8:06 PM on September 13

Response by poster: In case context would help, I'd like to use this number to help me determine some of my charitable giving.
posted by NotLost at 8:10 PM on September 13

Best answer: apparently the unit is usually the International Dollar which is just the US dollar at some particular date. So I guess it's $2.15 in September 2022 dollars, since that's when they updated the number, which comes to $2.38 if you use CPI to update it to today's dollars. Dunno how valid that is.

If you want to know how much $2.15 is worth in some country in PPP terms, you have to use the PPP conversion rates.
posted by BungaDunga at 8:13 PM on September 13 [3 favorites]

Response by poster: That was quick! Thanks, BungaDunga.
posted by NotLost at 8:17 PM on September 13

now I think about it, I think what you might want to do is take $2.15, convert it into the local currency using the PPP conversion rates, and then convert that number back into dollars using current exchange rates? That way they receive an amount that's worth $2.15 in PPP terms. I think that makes sense?
posted by BungaDunga at 8:34 PM on September 13

Response by poster: I don't know what the local currency would be. I would likely give it to some international organization that addresses either poverty directly or health.
posted by NotLost at 9:31 PM on September 13

Low income countries, which is where that poverty line is used, generally have PPP between 0.25 and 0.5 (meaning a dollar goes 2-4x further in those countries). That means $2.15 PPP, adjusted for inflation, would be somewhere around $0.70-$1.40 USD today, assuming that's 2017 $2.15.
posted by ssg at 10:52 PM on September 13 [2 favorites]