Measuring poverty can be done either absolutely or relatively. Absolute poverty refers to a set standard of living, such as having an income less than $1.25 per day. Relative poverty compares individuals within a society based on median income levels. Common measurements include the percentage of a population living below the poverty line, Gini coefficients of income inequality, and access to basic needs like food, water, shelter and clothing. Definitions and statistics of poverty vary between organizations, but billions of people worldwide still live in conditions of severe economic deprivation.

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Map of world poverty by country, showing
percentage of population living on less
than $1.25 per day. Information is based
on different years (2000­2006) for
different countries. Data is missing for
countries colored grey.
World map showing life expectancy.
World map showing the Human
Development Index.
The Gini coefficient, a measure of income
inequality, 2014.
Measuring poverty
From Wikipedia, the free encyclopedia
Although the most severe poverty is in the developing world,
there is evidence of poverty in every region. In developed
countries, this condition results in wandering homeless people
and poor suburbs and ghettos. Poverty may be seen as the
collective condition of poor people, or of poor groups, and in
this sense entire nation­states are sometimes regarded as poor.
To avoid possible stigma, they are commonly referred to as
developing nations.
Contents
1 Absolute vs relative poverty
2 Measurements
3 Definitions
4 Non­monetary indicators
5 Income inequality
6 Stats
7 Other factors
8 References
9 External Links
Absolute vs relative poverty
When measured, poverty may be absolute or relative. Absolute
poverty refers to a set standard which is consistent over time
and between countries. An example of an absolute
measurement would be the percentage of the population eating
less food than is required to sustain the human body
(approximately 2000–2500 calories per day).
Relative poverty, in contrast, views poverty as socially defined
and dependent on social context. One relative measurement
would be to compare the total wealth of the poorest one­third of
the population with the total wealth of the richest 1% of the
population. In this case, the number of people counted as poor
could increase while their income rises. There are several
different income inequality metrics; one example is the Gini
coefficient.
Measurements

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The percentage of the world's population
living on less than $1 per day has halved in
20 years. Most of this improvement has
occurred in East and South Asia. The
graph shows the 1981–2001 period.
Life expectancy has been increasing and
converging for most of the world. Sub­
Saharan Africa has recently seen a decline,
partly related to the AIDS epidemic. The
graph shows the 1950–2005 period.
The main poverty line used in the OECD and the European
Union is a relative poverty measure based on "economic
distance", a level of income usually set at 60% of the median
household income.[1]
(http://www.poverty.org.uk/summary/eapn.shtml)
The United States, in contrast, uses an absolute poverty
measure. The US poverty line was created in 1963–64 and was
based on the dollar costs of the U.S. Department of
Agriculture's "economy food plan" multiplied by a factor of
three. The multiplier was based on research showing that food
costs then accounted for about one­third of money income. This
one­time calculation has since been annually updated for
inflation.[1]
The US line has been critiqued as being either too high or too
low. For example, the Heritage Foundation, a conservative U.S.
think tank, objects to the fact that, according to the U.S. Census
Bureau, 46% of those defined as being in poverty in the U.S.
own their own home (with the average poor person's home
having three bedrooms, with one and a half baths, and a
garage).[2] Others, such as economist Ellen Frank, argue that
the poverty measure is too low as families spend much less of
their total budget on food than they did when the measure was
established in the 1950s. Further, federal poverty statistics do
not account for the widely varying regional differences in non­
food costs such as housing, transport, and utilities.[3]
Both absolute and relative poverty measures are usually based
on a person's yearly income and frequently take no account of
total wealth. Some people argue that this ignores a key
component of economic well­being. Major developments &
research in this area suggest that standard one dimensional
measures of poverty, based mainly on wealth or calorie
consumption, are seriously deficient. This is because poverty
often involves being deprived on several fronts, which do not necessarily correlate well with wealth. Access
to basic needs is an example of a measurement that does not include wealth. Access to basic needs that may
be used in the measurement of poverty are clean water, food, shelter and clothing. [4][5] It has been
established that people may have enough income to satisfy basic needs,but not use it usely. Similarly,
extremely poor people may not be deprived if sufficiently strong social networks, or social service systems
exist. For deeper discussion see.[6] See also the Wikipedia article on Multidimensional poverty.
Definitions

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The World Bank defines poverty in absolute terms. The bank defines extreme poverty as living on less than
US$1.25 per day>[7] (PPP), and moderate poverty as less than $2 a day. It has been estimated that in 2008,
1.4 billion people had consumption levels below US$1.25 a day and 2.7 billion lived on less than $2 a day.
The proportion of the developing world's population living in extreme economic poverty has fallen from 28
percent in 1990 to 21 percent in 2001. Much of the improvement has occurred in East and South Asia. In
Sub­Saharan Africa GDP/capita shrank with 14 percent, and extreme poverty increased from 41 percent in
1981 to 46 percent in 2001. Other regions have seen little or no change. In the early 1990s the transition
economies of Europe and Central Asia experienced a sharp drop in income. Poverty rates rose to 6 percent
at the end of the decade before beginning to recede.[8] There are criticisms of these measurements.[9][10]
Non­monetary indicators
Some economists, such as Guy Pfeffermann, say that other non­monetary indicators of "absolute poverty"
are also improving. Life expectancy has greatly increased in the developing world since World War II and
is starting to close the gap to the developed world where the improvement has been smaller. Even in Sub­
Saharan Africa, the least developed region, life expectancy increased from 30 years before World War II to
a peak of about 50 years — before the HIV pandemic and other diseases started to force it down to the
current level of 47 years. Child mortality has decreased in every developing region of the world.[11] The
proportion of the world's population living in countries where per­capita food supplies are less than 2,200
calories (9,200 kilojoules) per day decreased from 56% in the mid­1960s to below 10% by the 1990s.
Between 1950 and 1999, global literacy increased from 52% to 81% of the world. Women made up much
of the gap: Female literacy as a percentage of male literacy has increased from 59% in 1970 to 80% in
2000. The percentage of children not in the labor force has also risen to over 90% in 2000 from 76% in
1960. There are similar trends for electric power, cars, radios, and telephones per capita, as well as the
proportion of the population with access to clean water.[12]
Income inequality
Income inequality for the world as a whole is diminishing. A 2002 study by Xavier Sala­i­Martin finds that
this is driven mainly, but not fully, by the extraordinary growth rate of the incomes of the 1.2 billion
Chinese citizens. However, unless Africa achieves economic growth, China, India, the OECD, and the rest
of the middle­income and rich countries will diverge away from it, and global inequality will rise. Thus, the
economic growth of the African continent should be the priority of anyone concerned with decreasing
global income inequality.[13][14]
The Poverty Gap Index is the mean distance below the poverty line as a proportion of the poverty line
where the mean is taken over the whole population, counting the non­poor as having zero poverty gap.
Stats
Even if poverty may be lessening for the world as a whole, it continues to be an enormous problem:
One third of deaths — some 18 million people a year or 50,000 per day — are due to poverty­related
causes. That's 270 million people since 1990, the majority women and children, roughly equal to the
population of the US.
Every year nearly 11 million children die before their fifth birthday.

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In 2001, 1.1 billion people had consumption levels below $1 a day and 2.7 billion lived on less than
$2 a day.
800 million people go to bed hungry every day.[15]
Other factors
The World Bank's Voices of the Poor initiative,[16] based on research with over 20,000 poor people in 23
countries, identifies a range of factors that poor people consider elements of poverty. Most important are
those necessary for material well­being, especially food. Many others relate to social rather than material
issues.
precarious livelihoods
excluded locations
gender relationships
References
1. US Department of Human Services (http://aspe.hhs.gov/poverty/faq.shtml), FAQ Poverty Guidelines and Poverty
2. Rector, Robert E. and Johnson, Kirk A., Understanding Poverty in America
(http://www.fullemployment.org/Understanding%20Poverty%20in%20America.pdf), Executive Summary,
Heritage Foundation, January 15, 2004, No. 1713
3. Frank, Ellen, "Dr. Dollar: How Is Poverty Defined in Government Statistics?"
(http://www.dollarsandsense.org/archives/2006/0106dollar.html) Dollars & Sense magazine, January/February
2006. Accessed April 13, 2008
4. "Measuring Poverty ­ Poverty is defined by deprivation, and can be measured with economic or social
indicators." (https://www.boundless.com/sociology/textbooks/boundless­sociology­textbook/stratification­
inequality­and­social­class­in­the­u­s­9/poverty­78/measuring­poverty­463­3312/). https://www.boundless.com.
Retrieved 12 March 2015.
5. Pogge, Thomas. "Measuring Poverty" (http://thomaspogge.com/thomas­pogge/measuring­poverty/).
http://thomaspogge.com/. Retrieved 12 March 2015.
6. Thorbecke, E., 2008. Multidimensional Poverty: Conceptual and Measurement Issues. In: Kakwani, N., Silber, J.
(Eds.), The Many Dimensions of Poverty. Palgrave Macmillan, New York, pp. 3–20
7. "New Data Show 1.4 Billion Live On Less Than US$1.25 A Day, But Progress Against Poverty Remains
Strong" (http://www.worldbank.org/en/news/press­release/2008/09/16/new­data­show­14­billion­live­less­us125­
day­progress­against­poverty­remains­strong). http://www.worldbank.org/. The World Bank. Retrieved
13 March 2015.
8. Worldbank.org reference
(http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTPOVERTY/0,,contentMDK:20153855~menuPK
:373757~pagePK:148956~piPK:216618~theSitePK:336992,00.html)
9. Socialanalysis.Org (http://socialanalysis.org/)
10. TFF, 1999
(http://web.archive.org/web/19990427100741/http://www.transnational.org/features/chossu_worldbank.html)

5. 02/05/2015 Measuring poverty ­ Wikipedia, the free encyclopedia
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External Links
Graph of poverty line across E.U. countries (http://www.poverty.org.uk/L01e/index.shtml)
Poverty line definition at OECD (http://stats.oecd.org/glossary/detail.asp?ID=6337)
A map of world poverty (http://www.wacra.org/WORLD%20POVERTY%20MAP.pdf)
Retrieved from "http://en.wikipedia.org/w/index.php?title=Measuring_poverty&oldid=652905917"
Categories: Measurements and definitions of poverty Socioeconomics Economic development
Economic problems Injustice Social problems Social issues Income distribution
Macroeconomics and monetary economics Wealth
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11. The Eight Losers of Globalization (http://www.theglobalist.com/DBWeb/StoryId.aspx?StoryId=2429) by Guy
Pfeffermann. Pfeffermann, former Chief Economist of the International Finance Corporation, is the CEO of
Global Business School Network (http://www.gbsnonline.org). This is a non­profit organization supporting
business and management education in the developing world. 2002.
It is an area where not only is there little or no consensus among disciplines, but where economists
themselves have widely differing views. So, what can one say with a fair degree of certainty about
growth and inequality in developing countries? Life expectancy at birth — the most basic and
robust of all social indicators — has increased very considerably around the world.
12. www.sciencedirect.org (http://www.sciencedirect.org/science?_ob=ArticleURL&_udi=B6VC6­4F02KWN­
8&_user=10&_coverDate=01%2F01%2F2005&_rdoc=1&_fmt=summary&_orig=browse&_sort=d&view=c&_ac
ct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=3c12cc79f8121ee4e000396b0273a1eb)
13. Sala­i­Martin, Xavier. "The Disturbing "Rise" of Global Income Inequality"
(http://www.columbia.edu/~xs23/papers/GlobalIncomeInequality.htm). http://www.columbia.edu/. Retrieved
13 March 2015.
14. Brooks, David (27 November 2004). "Good News About Poverty"
(http://www.columbia.edu/~xs23/papers/worldistribution/NYT_november_27.htm). The New York Times.
Retrieved 13 March 2015.
15. millenniumcampaign.org (http://www.millenniumcampaign.org/site/pp.asp?c=grKVL2NLE&b=185518)
16. "Voices of the Poor"
(http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTPOVERTY/0,,contentMDK:20622514~menuPK
:336998~pagePK:148956~piPK:216618~theSitePK:336992,00.html). worldbank.org. THe World Bank.
Retrieved 13 March 2015.