Mapping Poverty Beyond the Averages: New Insights from Subnational Data – World Bank Blogs

Subnational Economic Well-being: A Report on Prosperity Gaps and Sustainable Development Goals

Introduction: Beyond Poverty Headcounts to Achieve SDG 1

An updated subnational database provides critical insights for achieving Sustainable Development Goal 1 (No Poverty). The analysis moves beyond traditional poverty metrics to assess the broader economic well-being necessary for shared prosperity. This approach introduces the “prosperity gap” as a key indicator.

• Objective: To track the progress of households not just out of poverty, but towards higher, more resilient living standards.
• Core Metric – The Prosperity Gap: This measures the average shortfall of household income or consumption from a middle-class benchmark of $28 per day (2021 PPP).

Analysis of Prosperity Gaps and Implications for SDG 8 and SDG 10

The data reveals significant disparities at the subnational level, highlighting challenges in achieving SDG 8 (Decent Work and Economic Growth) and SDG 10 (Reduced Inequalities). While regions with high poverty rates generally exhibit large prosperity gaps, the relationship is not always linear, exposing hidden vulnerabilities.

1. Low Poverty, High Vulnerability: Some regions demonstrate low official poverty rates, yet their prosperity gaps are substantial. Average incomes in these areas can be five times smaller than the middle-class threshold, indicating that a large portion of the population remains vulnerable to economic shocks, undermining progress towards sustainable economic growth (SDG 8).
2. Concentrated Deprivation: Conversely, other regions show similar, large prosperity gaps but have widely varying poverty rates (e.g., 40% to 60%). This pattern suggests that many households are clustered just below the poverty line, indicating deep-seated and widespread inequality (SDG 10) that a single poverty metric fails to capture fully.

Conclusion: Integrated Metrics for Building Resilient Communities (SDG 11)

A dual focus on both poverty rates and prosperity gaps is essential for formulating effective development policies aligned with the 2030 Agenda. This integrated approach provides a more complete picture of regional economic health and resilience, crucial for building sustainable communities (SDG 11).

• Poverty Rates: Capture immediate and acute deprivation, directly addressing the primary target of SDG 1.
• Prosperity Gaps: Reveal the depth of economic vulnerability and the distance households must travel to achieve secure and resilient living standards.

Taken together, these indicators allow policymakers to distinguish between subnational regions that are merely escaping subsistence and those that are on a sustainable trajectory toward long-term prosperity and resilience, thereby ensuring that no one is left behind.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

   The article addresses and connects to the following Sustainable Development Goals (SDGs):

   • SDG 1: No Poverty

     The article’s primary focus is on poverty measurement and alleviation. It explicitly discusses “poverty headcounts,” “poverty rates,” and the importance of “escaping poverty” as a first step towards prosperity. The analysis of subnational poverty data directly relates to understanding and ending poverty in all its forms.

   • SDG 10: Reduced Inequalities

     The article emphasizes the analysis of “subnational indicators” to reveal disparities between different regions within a country. By comparing regions with similar poverty rates but different “prosperity gaps,” it highlights inequalities in economic well-being and vulnerability, which is a core concern of SDG 10.

   • SDG 8: Decent Work and Economic Growth

     The concept of a “prosperity gap” and the goal of achieving “middle-class living standards of $28 per day” are directly linked to economic growth and prosperity. The article’s shift in focus from mere poverty escape to achieving “secure, resilient living standards” and “long-term prosperity” aligns with the objectives of sustainable economic growth and improved economic well-being for all.

2. What specific targets under those SDGs can be identified based on the article’s content?

   Based on the article’s content, the following specific SDG targets can be identified:

   • Target 1.2: By 2030, reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions.

     The article’s use of “subnational indicators” and its discussion of households that are not in poverty but “remain vulnerable to shocks” directly addresses the multidimensional nature of poverty and the need to reduce it beyond a single international threshold. The analysis of poverty rates at a subnational level is crucial for achieving this target.

   • Target 10.2: By 2030, empower and promote the social, economic and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other status.

     The article’s analysis of subnational data reveals economic exclusion. By showing that “some regions remain far from shared prosperity and resilience, despite having low poverty rates,” it highlights disparities in economic inclusion. The “prosperity gap” is a tool to measure how far certain regions are from being economically included in shared prosperity.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

   Yes, the article mentions and implies several indicators that can be used to measure progress:

   • Poverty Rate (or Poverty Headcount): This is explicitly mentioned throughout the article (e.g., “subnational regions with higher poverty rates”). It is a direct indicator used to measure the proportion of the population living below a poverty line, which is essential for tracking progress on SDG 1.
   • Prosperity Gap: This is a key indicator introduced and defined in the article as “how much the average income or consumption of households falls short of reaching a level of economic well-being associated with middle-class living standards.” It is used to measure the “depth of vulnerability” and the distance households are from achieving resilient living standards, making it a relevant indicator for both SDG 1 and SDG 10.
   • Middle-Class Living Standard Threshold: The article specifies a concrete value for this benchmark: “$28 per day (2021 PPP).” This value serves as a specific threshold indicator for defining and measuring the “prosperity gap” and tracking progress towards the goal of shared prosperity (relevant to SDG 8 and SDG 10).

4. Create a table with three columns titled ‘SDGs, Targets and Indicators” to present the findings from analyzing the article.

   SDGs	Targets	Indicators
   SDG 1: No Poverty	1.2: Reduce at least by half the proportion of people living in poverty in all its dimensions.	Subnational poverty rates. Prosperity Gap (as a measure of vulnerability and distance from secure living standards).
   SDG 10: Reduced Inequalities	10.2: Promote the social and economic inclusion of all.	Prosperity Gap (measuring the shortfall from a shared prosperity threshold across different subnational regions).
   SDG 8: Decent Work and Economic Growth	(Implied) Targets related to achieving higher levels of economic productivity and well-being.	Middle-class living standard threshold ($28 per day). Average income or consumption levels relative to the prosperity threshold.

Source: blogs.worldbank.org