Relative Poverty and Absolute Poverty: What’s the Difference?

Relative Poverty and Absolute Poverty: What’s the Difference?

4 mins readComment
Chanchal
Chanchal Aggarwal
Senior Executive Content
Updated on Mar 29, 2024 14:09 IST

Absolute poverty is when basic life requirements—food, clean water, and shelter are lacking or falling short and are measured against some universal standard. Relative poverty, on the other hand, is a state where the economic status of an individual or a family is far below the average set living standards within their society.

Relative Poverty and Absolute Poverty

Consider two families: one cannot afford clean water and enough food (absolute poverty), and another can afford basic needs but does not manage to put on newer clothes or access educational resources common in their community (relative poverty). This difference is a testimony to the difference between the struggle for survival and social exclusion arising from economic discrepancies. Absolute poverty is a state of lacking essentials universally recognized, while relative poverty is less income and fewer possessions than others around one.

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Table of Content

Comparative Table: Relative Poverty and Absolute Poverty

Aspect

Relative Poverty

Absolute Poverty

Definition

A condition where people are significantly worse off than the average within their society.

A condition where people lack basic necessities required for survival.

Measurement

Compared against the median income levels within a society.

Measured against a universal standard, such as the World Bank's poverty line.

Focus

Highlights inequality and social exclusion within a society.

Focuses on survival and meeting the most basic human needs.

Variability

Varies across different countries and societies based on average living standards.

Consistent worldwide, based on the same threshold of basic needs.

Key Factors

Income distribution, social policies, economic inequality.

Access to food, clean water, shelter, education, healthcare.

Goal of Interventions

To reduce inequality and improve access to opportunities and resources.

To ensure basic needs are met and elevate people above a survival threshold.

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What is Relative Poverty?

Relative poverty measures the economic status of individuals or households compared to the broader population within a specific society. It's defined by living conditions and income levels significantly below the average in a given country or region, reflecting inequality rather than an absolute lack of resources.

People experiencing relative poverty may afford basic necessities but still cannot maintain an average standard of living, facing social exclusion and limited access to opportunities. This concept emphasizes the social and economic disparities within societies.

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What is Absolute Poverty?

Absolute poverty refers to a condition where individuals lack the basic necessities of life, such as food, clean water, shelter, education, and healthcare, necessary for survival. It's measured against a predefined standard of living, often quantified by the international poverty line set by the World Bank. 

Those living in absolute poverty struggle to meet their minimal needs for physical health and well-being, facing extreme challenges in daily survival, often in developing countries. This stark form of poverty highlights the urgent need for global efforts in poverty alleviation.

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Difference Between Relative and Absolute Poverty

Definition: Relative poverty is based on societal standards and inequality, while absolute poverty focuses on a global threshold for basic survival needs.

Measurement: Relative poverty measures against the median income of a society; absolute poverty uses international standards like the poverty line.

Criteria: The criteria for relative poverty change with societal norms and economic conditions; absolute poverty criteria are constant and based on essential needs.

Variability: Relative poverty varies by country and over time; absolute poverty is consistent globally.

Focus: Relative poverty highlights social exclusion and inequality; absolute poverty emphasizes a lack of fundamental resources for life.

Intervention Goals: Interventions for relative poverty aim to reduce economic disparities; for absolute poverty, they aim to meet basic human needs.

Conclusion

Absolute poverty is the complete absence of basic needs necessary for the continuation of life, like food, housing, and safe/clean water. On the other hand, relative poverty is defined as the level below which a person or family does not have the income or resources to acquire a given minimum level of normal living conditions in the society to which one belongs.

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Top FAQs on Relative vs Absolute Poverty

What is the difference between relative and absolute poverty?

Absolute poverty measures the lack of basic necessities for survival, such as food, shelter, and clothing. Relative poverty compares an individual's economic status to the broader society, highlighting income inequality.

How is absolute poverty measured?

Absolute poverty is measured by assessing if individuals or families can meet their basic needs, often using international poverty lines like the World Bank’s threshold of $1.90 a day.

Why is relative poverty important?

Relative poverty is important because it reflects social exclusion and inequality within a society, showing how far people are from the average living standards of their community.

Can a society eliminate absolute poverty but still have relative poverty?

Yes, a society can eliminate absolute poverty by ensuring all members meet basic living standards, but relative poverty can persist due to income disparities and unequal wealth distribution.

About the Author
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Chanchal Aggarwal
Senior Executive Content

Chanchal is a creative and enthusiastic content creator who enjoys writing research-driven, audience-specific and engaging content. Her curiosity for learning and exploring makes her a suitable writer for a variety ... Read Full Bio