The Difference Between Relative & Absolute Poverty
- Absolute poverty is a situation where individuals cannot afford to acquire the basic necessities for a healthy and safe existence
-
- These necessities include shelter, water, nutrition, clothing and healthcare
- In 2022, the World Bank defined absolute poverty as anyone who was living on less than $1.90 a day (the so called international poverty line)
- Absolute poverty is more prevalent in developing countries than in developed ones
- Relative poverty is a situation where household income is a certain percentage less than the median household income in the economy
- Poverty in a household is considered relative to income levels in other households
- Households that are living with less than 50% of the median household income are considered to be in relative poverty
- Relative poverty is the main form of poverty that occurs in developed countries