Scientists Find Way to End Extreme Poverty for $318B a Year

Ending extreme poverty sounds impossible, but a team of scientists just proved it's not only doable but surprisingly affordable.

Researchers from Stanford and UC Berkeley calculated that lifting everyone in the world above the extreme poverty line would cost $318 billion per year. That's just 0.3% of global GDP, and seven times less than what the world spends annually on alcoholic beverages.

The breakthrough came when Stanford computer science graduate student Roshni Sahoo solved a problem that had stumped economists for years. She figured out how to calculate the exact amount needed to bring each of the world's 700 million extremely poor people above the $2.15 per day poverty line.

The solution involves giving cash directly to people who need it most. Paul Niehaus, co-founder of the nonprofit GiveDirectly, believed this simple approach could work globally. His organization has already distributed $1 billion to 2 million people in seven African countries and the U.S., letting recipients decide for themselves what they need.

The challenge was getting accurate data. Most poverty estimates rely on tiny household surveys covering just 0.001% to 0.01% of a country's population. Income alone doesn't tell the full story either.

Sahoo created software that analyzes household survey data from 23 countries accounting for half the world's poorest people. Her model considers not just income but living standards like roof materials, solar panels, and access to infrastructure. A family with a thatched roof gets more help than one with a tin roof, even at the same income level.

The Ripple Effect

The research shows that targeted cash transfers work far better than one-size-fits-all solutions. Universal basic income at the poverty line would cost $895 billion yearly, nearly three times more than the optimized approach.

GiveDirectly has already proven the concept works at smaller scales. Since 2009, they've shown that people make smart choices when given cash directly, investing in everything from education to small businesses to better housing.

The numbers reveal something powerful: ending extreme poverty isn't a mathematical impossibility or a distant dream. It's a choice well within humanity's reach, costing less than what we collectively spend on drinks.