What is a poverty line, and how are poverty lines calculated?

What is a poverty line, and how are poverty lines calculated?

Relative poverty is a household income below a certain percentage, typically 50% or 60%, of that country’s median income. This measurement takes into consideration the subjective cost of participating in everyday life. For example, plumbing is a necessity in some places; without plumbing, a person could be considered impoverished. But, in other regions, plumbing is a luxury. Relative poverty is helpful for considering income inequality within a country.

What is multidimensional poverty?

Multidimensional poverty acknowledges that poverty isn’t solely about income. Even if a person’s income is above the poverty line, their family may still not have basic services such as electricity, access to clean water, sanitation, and education.

The Global Multidimensional Poverty Index, developed in 2010 by the U.N. Development Programme and the Oxford Poverty and Human Development Initiative, takes into account a person’s healthcare, education, and living standards when measuring poverty levels.

The index considers 10 key indicators: nutrition, child mortality, years of schooling, school attendance, cooking fuel, sanitation, drinking water, electricity, housing, and assets. If a person is experiencing deprivation in three or more of these standards, they’re considered multidimensionally poor. This approach to measuring poverty offers insights into specific interventions needed in each country to eliminate it.

Lisa Perry and her family truck in clean water to their home in the Navajo Nation. Basic amenities such as access to clean water, electricity, and internet are scarce in isolated pockets of the Navajo Nation, spanning New Mexico, Arizona, and Utah. During the pandemic, Lisa also received much-needed protective equipment to safeguard her well-being during cancer treatment through World Vision’s partnership with a local church. Globally, 1.2 billion people in 111 countries lived in multidimensional poverty in 2022. (©2020 World Vision/photo by Laura Reinhardt)

How is poverty measured?

Poverty is measured by each country’s government, which gathers data through household surveys of their own population. While entities like the World Bank may provide support and conduct their own surveys, the primary responsibility lies with each country. However, traditional data collection methods can be slow and time-consuming. New forms of high-frequency surveys using estimates and mobile phone technology are being developed and tested.

A poverty line, also called a poverty threshold, is a set amount of income below which it becomes difficult, if not impossible, for people to afford essentials like food and shelter. Each country determines its poverty line by calculating the cost of meeting minimum needs. Households with incomes below this line are considered to be living in poverty.

The international poverty line is the standard measure used to gauge poverty levels. However, new methods such as the Global Multidimensional Poverty Index also consider factors like the lack of access to healthcare, quality education, adequate nutrition, sanitation, and living standards fru kazakh – all as potential signs of poverty.

Is the poverty line the same in every country?

No, the poverty line is not the same in every country. Different countries use various methods to calculate their poverty lines based on their unique economic and social circumstances.

What is the international poverty line?

The international poverty line, recently updated to $2.15 a day to show more accurately the cost of basic items and to adjust for inflation, is the universal standard for measuring global poverty. This line helps measure the number of people living in extreme poverty and helps compare poverty levels between countries.

As the cost of living increases, poverty lines increase too. Since 1990, the international poverty line has risen from $1 a day, to $1.25 daily, and in 2015 to $1.90. The figure rose from $1.90 to $2.15 in . This means that $2.15 is necessary to buy what $1 could in 1990.