The math formula the World Bank has used for 40 years to measure global poverty has been proven to be logically impossible.
April 2, 2026
Original Paper
Beyond the Beta Lorenz Curve: A New Parametric Family for Poverty and Inequality Estimation
arXiv · 2604.00772
The Takeaway
For decades, economists relied on a specific formula to estimate wealth distribution when data was missing, but researchers discovered it violates the basic rules of geometry. Correcting the math reveals that previous official estimates have been significantly undercounting poverty in 80% of analyzed cases.
From the abstract
The estimation of inequality and poverty measures is frequently constrained by a lack of individual data. Many countries, including China, continue to report income data in the form of aggregated income shares. In this context, the Beta Lorenz curve, introduced by Kakwani (Econometrica, 48, 1980), has become a standard tool for reconstructing income distributions at both academic and institutional levels. Notably, alongside the General Quadratic (GQ) Lorenz curve, it represents the primary speci