The Theory of Poverty

Air-conditioning, cold freezers and electronic scanning: when we go shopping, we take all of those things for granted, since we are used to them. But facing the truth, all those factors are luxuries, at least compared to the 986 million people (in 2007) in the world who live in poverty. This number has already decreased since 2005, when the poverty rate was 1.4 billion, but this is not due to more food or money, but because the subject of poverty is better understood in the world.
According to the World Bank, the cost of living was underestimated in many countries, since it was much steeper than expected. After the "poor" were recounted in the world, the poverty line was drawn equivalent to someone living on 1.25 dollars a day in America in 2005. Critics of this approach argued that the cost of living estimates are based on the a normal representative household, but according to critics, the poor are not representative. After this, the Asian Development Bank made a study of the prices in many Asian countries, and the results showed that the poor in 9/16 countries pay less. Therefore, the theory of poverty has to be reviewed. Now the World Bank hopes for an even lower poverty rate in the next years.

The Economist
The bottom 1.4 billion
Aug 28th 2008 DELHIFrom The Economist print edition
http://www.economist.com/finance/displaystory.cfm?story_id=12010733