Economic growth has spread throughout the planet over the last two hundred years with unprecedented speed, leading to improvements in many well-being indicators, albeit at variable rates (van Zanden et al., 2014[1]). However, economic growth does not necessarily improve the well-being of all people within a country at the same rate, and some may miss the tide altogether. This can be the case when economic inequality within a country rises with, for example, low incomes stagnating and top incomes increasing.
This chapter focuses on the evolution of extreme poverty during the period 1820-2018.2 Only a handful of attempts have been made to estimate global extreme poverty in the short and medium run (Bhalla, 2002[2]; Bourguignon and Morrisson, 2002[3]; Sala-i-Martin, 2006[4]; Chen and Ravallion, 2010[5]; Ferreira et al., 2015[6]), and even fewer in the long run (Bourguignon and Morrisson, 2002[3]; Van Zanden et al., 2011[7]). All these approaches rely on a single value of the poverty line for all countries and for all years, an approach that many scholars find insufficient (Deaton, 2001[8]; Srinivasan, 2009[9]; Reddy and Pogge, 2010[10]; Atkinson, 2016[11]; Allen, 2017[12]).
The goal of this chapter is to provide global, regional and country estimates of a specific measure of extreme poverty for (almost) all present-day countries of the world as if they were sovereign in 1820. The first step in this exercise is to choose a definition of poverty. This chapter relies on the cost of basic needs (CBN) approach used by Allen (2017[12]). In this approach, poverty lines are calculated for every year and country separately, rather than using a single global line. The second step is to gather the necessary data to operationalise this approach, alongside imputation methods in cases where not all the necessary data are available. The third step is to devise a method for aggregating countries’ poverty estimates on a global scale to account for countries that lack some of the relevant data.
