Question

Why is poverty line not same all over the world

Answer 1

When a country wants to measure poverty in its population, it first needs to determine who should be considered as poor. This is the case of individuals who do not attain the level of prosperity or living standards considered as minimal in that country. Economists will talk about a minimal welfare level. Developed countries use income to measure this notion of welfare. They define a poverty line, which is the income threshold allowing purchasing a bundle of goods giving the minimal welfare level. Everyone whose income is below the poverty line is then considered as poor. Because income varies a lot in time in developing countries, they use consumption instead of income in order to measure the welfare of their citizens