Ending Extreme Poverty: Global Cost Revealed

New research shows $318 billion per year could virtually eradicate extreme poverty worldwide

Feb. 4, 2026 at 2:55am

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A new working paper from UC Berkeley and UC San Diego researchers estimates that $318 billion per year, or 0.3% of global GDP, would be enough to bring hundreds of millions of people out of extreme poverty worldwide. The researchers used AI-driven machine learning to analyze detailed household survey data and precisely calculate the cost of providing direct cash transfers to lift the world's poorest above the $2.15 per day extreme poverty line.

Why it matters

Ending extreme poverty has long been a goal for development agencies and organizations, but progress has slowed in recent years as voters in many nations have become less willing to fund foreign aid. This new research provides a concrete, data-driven estimate of the cost, showing it is relatively affordable compared to global spending on other discretionary items. It also demonstrates how advances in data science and machine learning can help policymakers target aid more precisely to those most in need.

The details

The researchers studied poverty in 23 low-income countries, accounting for about half the world's poorest people, and found that extreme poverty rates in those countries could be reduced to 1% or less with an annual investment of $170 billion. They then scaled that to the rest of the world's poorest countries, concluding that $318 billion per year could virtually eradicate extreme poverty globally. This is less than the amount spent annually on alcohol (2.2% of global GDP) or cosmetics (0.6% of global GDP).

  • The working paper was published online in December 2026 by the National Bureau of Economic Research.
  • In 2022, the World Bank raised the benchmark for extreme poverty to $2.15 per person per day.

The players

Joshua Blumenstock

A professor at the UC Berkeley School of Information and the Goldman School of Public Policy, and the co-director of UC Berkeley's Center for Effective Global Action (CEGA).

Paul Niehaus

A professor of economics at UC San Diego and a co-author of the research.

CEGA

UC Berkeley's Center for Effective Global Action, which focuses on easing the pain of poverty through data-driven research and policy.

World Bank

A global financial institution that tracks the persistence of global poverty and raised the benchmark for extreme poverty to $2.15 per person per day in 2022.

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What they’re saying

“Our hope is to try and get to a more realistic estimate of the cost of eradicating extreme poverty through direct cash transfers, so that that lack of realism is no longer an excuse for not taking action.”

— Joshua Blumenstock (miragenews.com)

“The numbers tell us it isn't crazy to set our sights on a big, ambitious goal.”

— Paul Niehaus, Professor of Economics, UC San Diego (miragenews.com)

“Even if it's a moment where the cards might seem stacked against us, I think that we like to be optimistic.”

— Joshua Blumenstock (miragenews.com)

What’s next

The researchers note that most low-income countries cannot afford to make these poverty-reducing payments without outside support, and that global aid budgets have declined in recent years. However, they argue that the relatively modest cost of ending extreme poverty, compared to global spending on discretionary items, makes it a goal worth pursuing through renewed international cooperation and investment.

The takeaway

This research demonstrates how advances in data science and machine learning can help policymakers more precisely target aid to those most in need, making the goal of ending extreme poverty worldwide more achievable than ever before. While significant political and financial challenges remain, the researchers' findings suggest that eradicating extreme poverty is an ambitious but realistic goal that the global community should strive to accomplish.