This paper investigates how estimates of the extent and trend of consumption poverty in
China between 1990 and 2001 vary as a result of alternative plausible assumptions
concerning the poverty line and estimated levels of consumption. The exercise is motivated
by the existence of considerable uncertainty about the appropriate poverty lines to apply and
the level and distribution of resources in China. Our methodology focuses on the following
sources of variation: alternative purchasing power parity conversion factors (used to convert
an international poverty line), alternative estimates of the level and distribution of private
incomes, alternative estimates of the propensity to consume of lower income groups, and
alternative consumer price indices. It is widely believed that substantial poverty reduction has
taken place in China in the 1990s, and we find this conclusion to be robust to the choice of
assumptions. However, estimates of the extent of Chinese poverty in any year are greatly
influenced by the assumptions made. The choice among these estimates is likely to have
significant implications for the perceived extent and trend of world poverty. China’s record
of reducing consumption poverty is dramatic. It is unclear, however, whether this
achievement has been comparable across regions and whether there have been corresponding
national improvements in other aspects of human well-being.