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Table 7 shows the international poverty rates using the nominal and spatially deflated national consumption aggregates. Overall, the absence of spatial deflation in calculating extreme poverty rates might have a minor effect on the estimation of country-level international poverty rates, but it can have substantial impacts on international poverty measurement across regions and within countries. In all South Asian countries except for Nepal, the impact of spatial deflation is nontrivial. Without spatial deflation, urban areas have less poverty and rural areas have more poverty. For example, spatial deflation causes Nepal's urban poverty rate to be 4.3 percentage points higher and rural poverty rate to be 7.1 percentage points lower, compared with their respective nominal rates. If Bangladesh spatially deflated its consumption aggregates, then it would see an urban extreme poverty rate 3.3 percentage points higher and a rural extreme poverty rate 4.7 percentage points lower.

Table 7. 

International Extreme Poverty Rate in Urban and Rural Areas, With and Without Spatial Deflation

International Poverty Rate (%)Urban international Poverty Rate (%)Rural International Poverty Rate (%)
NominalSpatially DeflatedNominalSpatially DeflatedNominalSpatially Deflated
Bangladesh 18.5 16.0 6.7 10.0 22.8 18.1 
Bhutan 2.2 2.2 0.21 0.2 3.4 3.1 
India 21.6 19.4 13.4 26.4 24.8 16.5 
Maldives 7.3 7.3 3.9 5.8 10.2 9.2 
Nepal 20.0 14.9 4.7 9.0 23.4 16.3 
Pakistana 8.3 7.0 2.8 3.1 10.7 9.0 
Sri Lanka 1.9 1.7 0.3 0.4 2.3 2.0 
International Poverty Rate (%)Urban international Poverty Rate (%)Rural International Poverty Rate (%)
NominalSpatially DeflatedNominalSpatially DeflatedNominalSpatially Deflated
Bangladesh 18.5 16.0 6.7 10.0 22.8 18.1 
Bhutan 2.2 2.2 0.21 0.2 3.4 3.1 
India 21.6 19.4 13.4 26.4 24.8 16.5 
Maldives 7.3 7.3 3.9 5.8 10.2 9.2 
Nepal 20.0 14.9 4.7 9.0 23.4 16.3 
Pakistana 8.3 7.0 2.8 3.1 10.7 9.0 
Sri Lanka 1.9 1.7 0.3 0.4 2.3 2.0 

aPakistan's values are from 2010.

Source: Authors’ estimates based on South Asia Harmonized Micro Dataset (accessed September 15, 2017).

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