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Prosperity gap (average shortfall from a prosperity standard of $28/day)

The average shortfall from a prosperity standard of $25 per day (adjusted for differences in purchasing power parity across countries). It is measured as the average factor by which incomes fall short of $25.

World Bank, Poverty and Inequality Platform. Data are based on primary household survey data obtained from government statistical agencies and World Bank country departments. Data for high-income economies are mostly from the Luxembourg Income Study database. For more information and methodology, please see http://pip.worldbank.org., World Bank (WB), uri: http://pip.worldbank.org

Poverty: Shared prosperity

Annual

Population-weighted average

Methodology: The Prosperity Gap is a measure of shared prosperity. As a distribution-sensitive measure, the gap narrows when incomes increase anywhere and falls fastest when incomes of the very poorest increase: growth in income of a person earning $2.50 per day gets ten times more weight than growth in income of a person earning $25/day. Improvements (i.e., reductions) in the Prosperity Gap reflect increases in average income, reductions in inequality within countries, and (for global/regional aggregates) reductions in inequality between countries. It is estimated from nationally representative household surveys. When survey data are missing, in order to create global and regional aggregates, data are interpolated and extrapolated following the same methods that are used for global poverty estimates: https://datanalytics.worldbank.org/PIP-Methodology/lineupestimates.html Statistical concept(s): The Prosperity Gap measures the average factor by which everyone’s incomes in a society needs to vary to reach a prosperity standard of $28 per day (expressed in 2021 PPP dollars). Consider the following example of five individuals earning $2, $7, $14, $28, and $56. Their incomes will have to vary by a factor of 14, 4, 2, 1, and 0.5, respectively, to achieve a prosperity standard of $28. If the world consisted of only these five individuals, the Global Prosperity Gap would be the average of these factors (4.3). As shown in this example, poorer individuals contribute more to the Global Prosperity Gap. $28 is roughly the per capita household income at which countries transition from upper-middle-income to high-income status.

The World Bank Group's mission is to end extreme poverty and boost shared prosperity on a livable planet. Boosting shared prosperity is key to ensure that development gains are shared across vulnerable groups. The goal of boosting shared prosperity is defined using the prosperity gap.

World Bank, Poverty and Inequality Platform: https://pip.worldbank.org/

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