Question
What does poverty mean? What is the difference between absolute and relative poverty?
Answer
Poverty is a multifaceted issue that extends beyond mere income levels, affecting various aspects of life such as health, education, and living conditions. It is generally categorized into two main types: absolute poverty and relative poverty.
Absolute Poverty
Definition: Absolute poverty refers to a condition where individuals cannot meet the basic necessities for survival, such as food, shelter, and clothing. It is measured against a fixed standard, often using a poverty line like the World Bank’s $1.90-per-day threshold (Othman, Rosli and Muhammad, 2024; Lamas, 2022; Decerf, 2020).
Application: This measure is crucial for tracking extreme poverty, especially in developing countries, as it provides a clear benchmark for international comparisons (Othman, Rosli and Muhammad, 2024; Wan, Hu and Liu, 2021).
Relative Poverty
Definition: Relative poverty is defined in relation to the economic status of other individuals in the society. It considers income disparities and social exclusion, focusing on how income compares to the average income within a society (Othman, Rosli and Muhammad, 2024; Lamas, 2022; Lepenies, 2020).
Application: This measure is more relevant in wealthier nations where inequality and social exclusion are significant factors. It highlights the differences in living standards and the ability to participate in societal activities (Othman, Rosli and Muhammad, 2024; Dunn, 2021; Zou et al., 2023).
Key Differences
Measurement: Absolute poverty uses a fixed threshold to determine poverty, while relative poverty is measured against societal standards, often as a percentage of median or average income (Decerf, 2020; Coppola, Giraldo and Mazzuco, 2023).
Focus: Absolute poverty focuses on survival needs, whereas relative poverty emphasizes social inclusion and inequality (Othman, Rosli and Muhammad, 2024; Lepenies, 2020; Wan, Hu and Liu, 2021).
Policy Implications: Absolute poverty measures are essential for addressing basic needs, while relative poverty measures help in understanding and addressing social inequality and exclusion (Othman, Rosli and Muhammad, 2024; Dunn, 2021; Zou et al., 2023).
Understanding both absolute and relative poverty is crucial for developing comprehensive poverty alleviation strategies. Absolute poverty provides a baseline for survival needs, while relative poverty addresses social disparities and inclusion. Combining these measures can offer a more complete picture of poverty and guide effective policy interventions.
References
Othman, M., Rosli, Z., & Muhammad, M., 2024. Multidimensional Poverty: Complementary Measure to Absolute and Relative Poverty. International Journal of Research and Innovation in Social Science. https://doi.org/10.47772/ijriss.2024.8090319
Lamas, L., 2022. Pengaruh Kesempatan Kerja dan Pertumbuhan Ekonomi terhadap Tingkat Kemiskinan di Kota Jambi. Science of Management and Students Research Journal (SMS). https://doi.org/10.33087/sms.v3i4.129
Lepenies, P., 2020. Metrics, Politics and Definitions: How Poverty Lost Its Social Context and What This Means for Current Debates. **, pp. 57-73. https://doi.org/10.1007/978-3-030-31711-9_4
Decerf, B., 2020. Combining absolute and relative poverty: income poverty measurement with two poverty lines.. Social Choice and Welfare, 56, pp. 325 – 362. https://doi.org/10.1007/s00355-020-01279-7
Dunn, A., 2021. Necessities Laid Bare: An Examination of Possible Justifications for Peter Townsend’s Purely Relative Definition of Poverty. Journal of Social Policy, 52, pp. 237 – 255. https://doi.org/10.1017/S0047279421000532
Wan, G., Hu, X., & Liu, W., 2021. China’s poverty reduction miracle and relative poverty: Focusing on the roles of growth and inequality. China Economic Review, 68, pp. 101643. https://doi.org/10.1016/J.CHIECO.2021.101643
Coppola, L., Giraldo, A., & Mazzuco, S., 2023. Poverty and its dynamics in Italy: comparing results by using absolute and relative poverty thresholds. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.4617531
Zou, W., Cheng, X., Fan, Z., & Lin, C., 2023. Measuring and Decomposing Relative Poverty in China. Land. https://doi.org/10.3390/land12020316
Smelser, N. J. and Baltes, P. B. (eds.) 2001. International Encyclopaedia of the Social and Behavioural Sciences. Elsevier. Oxford Science Ltd.
