In addition to the technical challenges with creating a global poverty count as outlined in
my post below, there are also conceptual issues with poverty counts that I would be remiss to not include.
First is the simple idea of a head count, as defined by those above or below a defined consumption level. People's lives are not significantly different just below or just above that line, and yet those above are excluded from our numbers. Small changes to the line can lead to big changes in the count. Focusing on poverty counts could create an incentive to move people just above the line, so the numbers imply big improvements when in reality people's lives haven't changed that much.
Second, poverty head counts only look at who's below a line, but not how far below it they are. As a consequence two countries could have similar poverty count numbers with drastically different welfare situations. Other measures such as depth and severity account for how consumption varies below the line.
Third, poverty counts are based on consumption level and don't take into account consumption mix. This means that a household that allocates nearly all of its consumption toward education, health care, and nutrition looks exactly like a household that spends a disproportionate amount on alcohol and tobacco. This is one issue I have in particular when we look at microfinance's impact on poverty because there's evidence of shifts in the consumption mix even through total consumption doesn't go up, which could indicate welfare improvements.
I don't by any means believe that these issues make poverty headcounts useless, but I do think they are things we should keep in mind when we are using these numbers.
