Q:

What is the meaning of relative poverty?

A:

Quick Answer

Relative poverty is used to measure wealth in relationship to other members of a distinct population. Relative poverty measurements contrast with absolute poverty measurements, which measure poverty levels based on a set standard encompassing the entire population.

Know More
What is the meaning of relative poverty?
Credit: Geraint Rowland CC-BY 2.0

Full Answer

Relative poverty is frequently used to measure wealth disparities in wealthier nations. Such countries adjust the poverty line to reflect factors such as economic growth, changes in income distribution, and the price and accessibility of necessary goods and services. It can also change based on local social perceptions of what is needed to maintain a certain living standard. Conversely, the absolute poverty level, as set by organizations such as the World Bank, is considered independent of a society's growth or changes in income distribution levels. While organizations such as the World Bank may adjust the absolute poverty level overtime, such adjustments rely solely on the worldwide cost of accessing the goods and services necessary for survival. To determine the poverty line based on relative poverty, statisticians use income inequality metrics, such as the Gini index, Palma ratio, 20:20 ratio, Hoover index and Theil index to calculate appropriate levels. For example, the Palma ratio can be used to set poverty levels based on the distribution of gross domestic product among the richest 10 percent and the poorest 40 percent of people in a given country.

Learn more about Social Sciences

Related Questions

  • Q:

    What is the relationship between poverty and inequality?

    A:

    In many cases, people who have unequal opportunities in life often live in poverty, and people who live in poverty may be treated unequally. Although a person who experiences poverty may suffer from inequality, every person who faces inequality is not impoverished. Inequality directly affects the amount and severity of poverty within a nation. Countries that have greater inequality often have many citizens living in poverty.

    Full Answer >
    Filed Under:
  • Q:

    Why does poverty exist?

    A:

    Poverty stems from many factors, including lack of jobs for workers, health conditions, inadequate access to schools and training facilities and government corruption. Poverty affects millions of people worldwide, including families and individuals in the United States. It exists in wealthy and poor countries alike, and affects citizens directly or indirectly.

    Full Answer >
    Filed Under:
  • Q:

    What is global poverty?

    A:

    Poverty is defined as the general scarcity of material possessions or money. Therefore, global poverty represents this general scarcity around the globe.

    Full Answer >
    Filed Under:
  • Q:

    How did poverty start?

    A:

    The beginning of poverty in the United States is historically related to the Great Depression after the stock market crashed. More modern influences on poverty include the 2008 recession.

    Full Answer >
    Filed Under:

Explore