Resources | Subject Notes | Economics
Poverty is a complex issue with different dimensions. Understanding the distinction between absolute poverty and relative poverty is crucial for analyzing economic development.
Absolute poverty refers to a condition where individuals lack the basic necessities for survival. This typically includes access to adequate food, shelter, clothing, and healthcare.
It is often measured using a poverty line, which is a fixed income threshold below which people are considered to be in absolute poverty. This line is usually adjusted for the cost of a basic food basket.
Key characteristics of absolute poverty:
Relative poverty, on the other hand, is defined in relation to the living standards of others in a particular society. It describes individuals who are significantly poorer than the average standard of living in their society.
It's not about a lack of basic necessities, but rather about being disadvantaged compared to the majority of people in a given country. Relative poverty can exist even in wealthy nations.
Key characteristics of relative poverty:
The following table summarizes the key differences between absolute and relative poverty:
| Feature | Absolute Poverty | Relative Poverty |
|---|---|---|
| Definition | Lack of basic necessities for survival | Disadvantage compared to the average living standards in a society |
| Measurement | Fixed poverty line (e.g., cost of a basic food basket) | Percentage of median income |
| Context | Typically associated with developing countries | Can exist in both developing and developed countries |
| Focus | Material deprivation | Inequality and social exclusion |
Understanding both absolute and relative poverty is essential for a comprehensive analysis of poverty and inequality. While absolute poverty highlights the lack of basic necessities, relative poverty sheds light on the social and economic disparities within a society.