Poverty

Meaning of Poverty (AO2)

Poverty is an economic condition of being extremely poor and unable to meet basic needs. There are 2 types of poverty:

• Absolute Poverty: When people are unable to access basic human needs such as food and shelter. 

• Relative poverty: When people are unable to reach a specified level of income, typically 50% of their countries' average earnings.

Measuring Poverty (AO2)

There are multiple ways to measure poverty but the syllabus requires that you know 2 types.

Single indicators of measuring poverty:

• International Poverty Lines: A minimum threshold of income people must earn in order to have access to basic human needs. Currently this is at $1.90/day. This does not take infrastructure into account, and is much too low in wealthier countries in the world. 

• Minimum Income Standards: A minimum income needed for what members of the public think is an acceptable living standard. 

Composite indicators of measuring poverty:

• Multidimensional Poverty Index: An index that tracks many components of poverty, such as health, education, and standards of living. It therefore offers a more thorough indication of poverty

Difficulties in Measuring Poverty (AO2)

• Relative poverty is quite subjective

• Poverty is a multidimensional issue, and using a single indicator could misrepresent the actual state of poverty in a society.

• The international poverty line does not account for Purchasing Power Parity; $1.90/day in the US is not enough to meet basic human needs because things cost more in the US than in Chad, for example.