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Off target? Assessing poverty nowcasting amidst the COVID-19 crisis [1]

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Date: 2025-05

Beyond its impact on health, the COVID-19 pandemic impacted poverty through job losses, shutdowns, and much more. Yet, obtaining timely and comparable estimates of poverty during the pandemic proved challenging. With social distancing measures in place, the primary method of data collection for estimating poverty, conducting household surveys, became impractical in numerous countries.



As a result, we and others quickly turned to producing poverty nowcasts—timely estimates of poverty based on modelling from available data sources. In April 2020, we released poverty nowcasts using the latest country-level data from the Poverty and Inequality Platform (PIP) extrapolated forward with GDP growth projections. Prior to COVID-19, this simple approach was shown to work relatively well compared to more complex methods, yet it is unclear how well it performed during a time of an unprecedented global crises like COVID-19.



Over the past couple of years, survey-based estimates of poverty for several countries have become available in PIP. We now have 64 countries with an estimate of poverty in 2020 and 70 in 2021. However, there is uneven regional representation—34 out of 62 countries in Europe and Latin America have survey estimates for 2020 while only 6 out of 70 countries in the Middle East & North Africa, Sub-Saharan Africa, and South Asia combined have survey estimates for 2020. Nonetheless, this data allows us to finally, partially assess the accuracy of our COVID-19 poverty nowcasts. Though some estimates for 2020 and 2021 are still being processed, a full assessment of the nowcasts will never be possible due to the paucity of survey data collection during the pandemic.



After the initial nowcasts, we generated seven other nowcasts at the poverty lines typical of low-, lower-middle, and upper-middle income countries: $2.15, $3.65, and $6.85 per day. The nowcasts coincide with the updates to World Bank GDP projections (through the Macro and Poverty Outlooks and Global Economic Prospects). From October 2022 onwards, we also relied on microsimulations and phone survey data where possible.



Our nowcasts were focused on predicting global poverty, so we start by evaluating how well we predicted changes in poverty from 2019-2020 at the global level. As these global estimates in PIP still partially are based on extrapolations and interpolations, we also evaluate how our nowcasts fared at the country-level where we have more reliable survey-based estimates. The country evaluations focus on countries with comparable survey-based poverty rates in 2019 and 2020 (or 2020 and 2021), which reduces our sample to 54 in 2020 and 50 in 2021.



We calculate the difference between the actual change in poverty rates from 2019 to 2020 (or from 2020 to 2021) and the nowcasted change in poverty rates. An estimate closer to zero indicates better accuracy and a positive difference implies an underestimation of poverty changes. If a country already had a survey-based estimate of poverty in 2020 or 2021 at the time a nowcast was conducted (which increasingly is the case the later the “nowcast” was conducted), we remove it from the evaluation, as the nowcast was no longer in need.

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[1] Url: https://blogs.worldbank.org/en/opendata/off-target--assessing-poverty-nowcasting-amidst-the-covid-19-cri

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