Published by Patrick Mutisya · 14 days ago
To understand the difference between absolute poverty and relative poverty, how each is measured and the implications for policy.
| Aspect | Absolute Poverty | Relative Poverty |
|---|---|---|
| Definition | Living below a set threshold that reflects the minimum calories, shelter and basic services needed for survival. | Living below a certain proportion (often 60 % or 50 %) of the median household income in a given country. |
| Measurement | Based on a fixed monetary line (e.g., \$1.90 per day in 2022 PPP terms). \$P_{abs}= \text{poverty line (constant)}\$\$ | Based on the distribution of income within a society. \$P_{rel}=k \times \tilde{y}\$ where \$k\$ is the chosen proportion (e.g., 0.6) and \$\tilde{y}\$ is the median income. |
| Focus | Basic physical survival – food, clean water, shelter, basic health. | Social inclusion – ability to participate in typical activities of the society. |
| Applicability | Useful for comparing poverty across countries and over long periods. | Useful for assessing inequality and social exclusion within a particular country. |
| Policy Implications | Targeted aid, food programmes, basic health services, infrastructure to raise the minimum standard of living. | Progressive taxation, social welfare, education and training programmes aimed at reducing income inequality. |
| Examples | Someone earning $1.50 a day in a low‑income country. | A household earning \$15,000 per year in a country where the median household income is \$50,000. |
Absolute poverty highlights the most severe deprivation and is essential for international development goals such as the UN Sustainable Development Goals (SDGs). Relative poverty, on the other hand, captures the social dimension of poverty, showing how income gaps affect participation in society and overall well‑being.