Question

Differentiate between absolute and relative poverty.

Answer 1

Answer:

Absolute poverty:

   1.When a household does not have sufficient income to sustain even a basic acceptable standard of living / meet basic needs

  2. Absolute poverty thresholds will vary between developed and developing countries

 3. The extreme poverty measure now used by the World Bank is the percentage of the population living on less than $1.90 a day (PPP)

Relative poverty

   1.A level of household income that is considerably lower than the median level of income within a country

   2.The official UK relative poverty line is household disposable income (adjusted for household size) of less than 60% of median income

The official poverty line:

An income level that is considered minimally sufficient to sustain a family in terms of food, housing, clothing, medical needs, and so on.

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Answer 2

Answer:

Absolute Poverty

• Absolute Poverty refers to a phenomenon in which a section of the society is unable to fulfil even its basic necessities of life concerning food, clothing, housing, education and health.

• It is caused because of many factors like over population, low economic growth, over dependence on agriculture, etc.

• There are remedies to remove absolute poverty by Poverty Alleviation Programme and other ways.

• It is measured by 'Poverty Line.'

Relative Poverty

• Relative Poverty refers to a phenomenon in which inequalities of income exist and hence one person is poor in relation to other person.

• It is caused because of inequalities of income.

• It can't be removed as people have different skills and accordingly their incomes vary.

• It is measured by 'Gini Co- efficient.'