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This UN page about 'Hunger', for example, says,

Nearly half the world’s population, 2.8 billion people, survive on less than $2 a day.

Quotes like this are shocking; but practically, I don't understand how a person could survive with food, water, clothing, etc. on such little income.

Does half the world's population live on less than $2 a day? What does money mean to those people? Does money not really matter because most of their living is outside the realm of money (e.g. making their own things, food, etc.)?

In my country you could easily get a meal for $10, or cooking yourself about $3 or $4 per person. In that case, does "$2 a day" mean anything? Or is it just there to shock people?

Update

Just to clarify, the quote (or similar) is often used for first-world countries to imagine living—as they are, where they are—on an income of $2 per day.

My question is: Is this an accurate representation of the poverty of half the world? Or is it skewed, because the income is a fixed value, where costs of living and sources of food/goods can be so varied.

That's why this question is on Skeptics, not other SE sites.

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    Less developed countries also have low price for food, water etc. (Though low quality and many times unsafe). For example in India you can easily get 3 meals under $1. I am not saying $2 per day in India is comfortable but posible – Tanmoy Aug 11 '16 at 3:12
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    I guess that's part of my question. In my country you could easily get a meal for $10, or cooking yourself about $3 or $4 per person. In that case, does "$2 a day" mean anything? Or is it just there to shock people? – Mirror318 Aug 11 '16 at 3:33
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    This may not be a question appropriate to the site. Maybe ask if the statistic of half the world population living on less than $2/day is accurate, but a question of HOW isn't for this site. – JasonR Aug 11 '16 at 12:01
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    This could possibly be asked on the politics, economics or history sites, not sure which would be the best fit. In the meantime, consider subsistence farming, and that the $2/day per person figure may be after splitting the income among family members (there's a strong link between poverty and family size - basically your kids are your pension and you need enough that at least some will live to keep you going in old age) – user568458 Aug 11 '16 at 12:43
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    Can I just point out to the people criticizing the word "How" in the title: that's not the asker's wording. That was the result of an edit. If you don't like it and have enough reputation, edit it back to the original title. – Brythan Aug 11 '16 at 19:08
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The 'keyword' to look for is 'PPP' for Purchasing Power Parity. This is a way of translating incomes across the world into a common (generally dollar) currency taking into account the difference in prices (and inflation too, if comparing back in time).

The official World Bank figure for "absolute poverty" is $1.90 a day, per person. On the linked page, they were predicting that 700 million people would be 'absolutely poor' in 2015.

This is no where near the 'Half the world' figure on the page you linked to, so I guess maybe the UN are using absolute dollar figures.

To answer your last question: it is both true and shocking, and even more shocking when you take into account PPP. This means that 700 million people are having to get by on the equivalent of $1.90 a day, and as you say, that doesn't get you far at all.

All is not doom-and-gloom though, things are really getting better all the time.

enter image description here

  • So is the $1.90 not literally an equivalent to 1.90USD, but instead translated, considering the cost of living, etc? – Mirror318 Aug 11 '16 at 22:44
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    I think it's the opposite: i.e. if you take purchasing power into account, only 700 million are living on two translated dollars per day. So if it's true that "nearly half the world" (e.g. three and a half billion people) are living on $2/day then this must be referring to absolute dollars (like you get from a bank), not translated-considering-the-cost-of-living dollars. – ChrisW Aug 11 '16 at 22:59
  • @Mirror318, that's my understanding, yes. – Benjol Aug 12 '16 at 4:45
  • @ChrisW, I think you're agreeing with my third paragraph, right? – Benjol Aug 12 '16 at 4:46
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    and even then, those in absolute poverty at least in part live in non-monetary economies so shouldn't be counted in the results as they have other primary means of exchange, like barter. And that includes not just secluded rain forest tribes but entire villages in countries that have monetary economies (often in developing nations but also in the former USSR it happens in remote areas). These people in monetary terms are extremely poor, but they don't live in actual poverty as they don't need money the way we do to get their necessities (and even marginal luxuries). – jwenting Aug 12 '16 at 21:14
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No, but it is true that a very large number of people are in "extreme poverty", as defined by the World Bank. One recent estimate (source) is that

in 2015, there were 702 m people living on less than $1.90 per day (at 2011 prices).

enter image description here


The quote from that webpage ("nearly half the world’s population, 2.8 billion people, survive on less than $2 a day") was probably true when written, but is now probably outdated for two reasons (it doesn't give sources, so I can only guess why it's outdated):

  1. Inflation. (My guess is that they were using 2005 prices. The current threshold uses 2011 prices.)
  2. More importantly: Progress in reducing poverty. Rapid progress continues to be made in reducing poverty. (My guess is that the webpage was using figures circa 2010.)

A frequent misconception/myth (expressed for example by @Tanmoy in the comments) goes something like this:

Myth #1: "stuff is much cheaper in poorer countries; therefore $$1.90 can go a longer way in poorer countries."

This is wrong. When such figures as "702 million people survive on less than $1.90 per day" are quoted, they really DO mean that the world's most miserable 702 m people have to survive as if they had less than $1.90 a day, while facing the average USA prices!

This is shocking and unbelievable for those from countries with no historical experience of extreme poverty (e.g. the US). But it is sadly true.

How do these 702 m people survive on less than $1.90 per day at USA prices? Well, many of them don't. And those who do, manage to survive, only very barely and very miserably.


Another frequent myth that has cropped up a couple of times in the comments above (@jwenting and @PaulJohnson):

Myth #2: "The $1.90/day figure overlooks non-monetary transactions (e.g. barter) and self-produced, self-consumed goods. ...

"... For example, a farmer who owns a huge farm and lots of livestock, simply survives off his produce, never engages in any monetary transactions with anyone, will be counted by the World Bank as having an income of $0/day and therefore be counted as 'extremely poor'. But he may actually be extremely well-off and have all that he needs."

This is also wrong. Unfortunately and again shockingly, the $1.90/day figure already accounts for all such non-monetary transactions and also all self-produced, self-consumed goods.

So the farmer with the huge farm will also have a (correspondingly-huge) monetary value imputed to his annual agricultural produce, and he will NOT show up as having $0/year in the poverty count. Instead, he will show up as a reasonably affluent man.


Bottom line: The $1.90/day figure is unbelievable for most people living in rich countries. But that's really what it means. Surviving on $1.90 per person per day, in a place where the prices of goods and services are the same as in Averagetown, USA.


Evolution of the extreme poverty threshold:

  • $1 (or $1.01) per day at 1985 prices.
  • $1.08 per day at 1993 prices.
  • $1.25 per day at 2005 prices.
  • $1.90 per day at 2011 prices. (This last update was officially announced in October 2015.)

(One source for the above figures.)

Note that at least conceptually, the extreme poverty threshold is supposed to have stayed the same in real terms. That is, $1.90 per day at 2011 prices is supposed to be equivalent to $1 per day at 1985 prices (in real terms). Once again, it must be stressed that, shockingly enough, these are USA prices.


Here's a YouTube video that discusses these issues and in particular dispels the myths and misconceptions mentioned above.

  • Good answer, however it starts off saying "Yes...", but the question actually refers to "nearly half the world's population", which 700m is far from. So you should say something more like "No... but...." – Mirror318 Aug 12 '16 at 2:23
  • @Mirror318: Fair enough, I've updated it accordingly – Kenny LJ Aug 12 '16 at 2:24
  • As I read somewhere else, there aren't figures for people who survive on less than $1.90 because generally they don't survive ;( – Benjol Aug 17 '16 at 9:22
  • You have a very good answer. However I disagree with Myth #2 as written. If someone is self sufficient by growing/harvesting their own food, have invested in solar power, geothermo heating, and do not work, is living on under $2 a day a bad thing? Even w/o investing money in renewable energy - for example Amish, why does living with less mean low quality? Conversely, it should be shameful that someone REQUIRES more to sustain themselves. I doubt that any Amish would say that they manage to survive, only very barely and very miserably. I assert society plays a bigger role in what misery is – Some Freemason Aug 18 '16 at 13:45
  • Also, is it wrong to believe that the world is too populated with humans who can't sustain themselves? As observed in nature, if the population cannot sustain, it dies. Not all die, but those w/o the opportunity to survive - either because of location or natural selection. Should every human over reproduce and each of those humans live at some standard of living described by Americans? I assert; our single family houses, vehicles which commute us many miles to our occupations (generally only one person is in the car) is unsustainable and shouldn't be a model for the rest of the world. – Some Freemason Aug 18 '16 at 13:56

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