23 Questions
What is the primary difference between absolute poverty and relative poverty?
The focus on survival versus social exclusion
What does the median income per person in a country relate to?
The relative poverty line
What is the consequence of earning more than the absolute poverty line but still experiencing poverty?
One is still excluded from society
What does the absolute poverty line tend to be?
A single standard across all countries
What happens to relative poverty when a country's per person income increases or decreases?
It increases or decreases accordingly
What are the two ways to think about poverty?
Survival-threatening poverty and societal exclusion
What does the vertical axis in the graph represent?
Resources
What is the significance of the arbitrary line drawn on the graph?
It represents the minimum level of resources needed to survive
What is often used to denote the minimum level of resources needed to survive?
Level of income
What is the concept that has an absolute value associated with it?
Absolute poverty
What is true about the level of absolute poverty?
It applies universally regardless of location
What is a limitation of using arbitrary income or resource cutoffs to measure absolute poverty?
It does not account for differences in cost of living
What is an example of a resource that is necessary for survival?
Shelter
What is absolute poverty primarily concerned with?
Extremely low income levels in developing countries
What happens to absolute poverty over time if a country's median income level rises?
It remains unchanged unless redefined
Why is relative poverty used in developed countries like the United States?
Because relative poverty considers income disparities within a country
What is relative poverty primarily concerned with?
Income disparities within a society
If a country's median income level rises, what happens to the relative poverty line?
It increases proportionally with median income
What is the primary difference between absolute and relative poverty?
Absolute poverty is based on a fixed income level, while relative poverty is based on a percentage of median income
Why is relative poverty important to consider in a society?
Because it helps identify people who are excluded from society due to low income
What is the significance of the median income level in relative poverty?
It is the income level used as a benchmark for relative poverty
What happens to relative poverty if a country's income rises, but the rise is not evenly distributed?
Relative poverty increases
Why does relative poverty consider people whose incomes are too low in their own society?
Because they are being excluded from society
Study Notes
Understanding Poverty
- There are two ways to think about poverty: absolute poverty and relative poverty.
Absolute Poverty
- Absolute poverty is a situation where an individual's resources are so low that they threaten their survival.
- This concept has an absolute value associated with it, which is often measured by income (e.g., $1-2 per day).
- The absolute poverty line is an arbitrary cutoff that applies universally, regardless of location (e.g., Africa, Canada, or the Arctic).
- However, this line may not consider real-life variability in resource needs, such as heating expenses in the Arctic.
Characteristics of Absolute Poverty
- Absolute poverty has a fixed threshold that does not change over time, unless redefined.
- As a society becomes richer, the median level of income may rise, leading to a decrease in absolute poverty.
Relative Poverty
- Relative poverty is a concept that measures poverty as a percentage level below the median income of a country.
- This concept is linked to a country's income and is often defined as less than 60% of the median income.
- Relative poverty is concerned with people whose incomes are so low in their own society that they are excluded from society or sidelined.
Key Differences between Absolute and Relative Poverty
- Absolute poverty focuses on survival and basic necessities of life, whereas relative poverty talks about being excluded from society.
- Absolute poverty has a single standard that applies across all countries, whereas relative poverty is related to the society or country where an individual is living.
- Absolute poverty tends to stay the same, whereas relative poverty can track with a country's per person income going up and down.
Explore the concepts of absolute and relative poverty, including the difference between the two and how they are measured.
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