Global Poverty Progress – Model Income Past, Present and Future

There is an analysis of the model income of the world from 1970 and 2006. Model income is the level of income that is most common in the world. The graphs show on the left vertical the population with a particular income level and the bottom horizontal shows the income level. In 1970 about 50 million people had $500 of income per year. In 2006, About 100 million had $5000 of income per year.

World poverty is falling. Between 1970 and 2006, the global poverty rate has been cut by nearly three quarters. The percentage of the world population living on less than $1 a day (in PPP-adjusted 2000 dollars) went from 26.8% in 1970 to 5.4% in 2006. 1970 to 2006, poverty fell by 86% in South Asia, 73% in Latin America, 39% in the Middle East, and 20% in Africa.

An Attempt to Project Foreward 40 Years on Model Income
Goldmans Sachs had a forecast of GDP for the top 22 countries until 2050 and this was used to approximate world GDP growth. Using wikipedia estimates of future population the mean average GDP per capita was calculated. This was used to approximate the shift in modal income into the future.

There are several ways that this method could be off.

1) The Goldman Sachs estimates could be wrong. In particular China’s GDP is projected by some to be 20% of Goldmans estimate and some have it 200% of Goldman Sachs. Disruptive technology such as molecular nanotechnology, super robotics, cheap nuclear fusion or AGI could arrive and alter the economic picture.

2) The World GDP may not track proportionally with the GDP of the top 22.

3) The modal income may not shift exactly in proportion to the mean income.

4) The population projection could be off

The biggest source of error is the first and the degree of possible error shrinks for the factors listed.

Projected Modal Income is on the last line of the table.