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Difference between Relative Poverty and Absolute Poverty

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What is Poverty?

Poverty is a particular issue that affects many countries around the world. There can not be a universally acknowledged definition of poverty. Broadly it can be said that:

Poverty refers to a state in which an individual is unable to fulfil even the basic necessities of life. The minimum requirements include food, clothing, shelter, education, and health facilities.

A nation suffers from a cycle of poverty when a large portion of the population is deprived of even the most necessities of life for an extended period. If the minimum needs are not fulfilled, a person has to undergo pain and suffering. Sickness and disabilities render him helpless in all aspects of life. Generation after generation, the person who lives in poverty grows in poverty and dies in poverty. The population either breeds or multiplies itself.

Measures of Poverty

A country can overcome the problem of poverty only when it identifies poor people. To identify them, it is essential to work out the extent of poverty. The two measures that determine the extent of poverty are as follows:

1. Relative Poverty:

Relative Poverty refers to the poverty of people, in comparison to other people, regions, or nations. For example, if A has a lower income than B, then it can be concluded that A is relatively poor. It facilitates the understanding of the relative population of different segments of society. Relative Poverty can be measured through the concepts of the Lorenz Curve and Gini Coefficient. However, the disadvantage of relative poverty is that it merely displays the relative positions of various segments of the population in the income hierarchy and does not account for how poor a person is or whether he is deprived of the basic requirements of life or not. 

2. Absolute Poverty:

Absolute Poverty refers to the total number of people living below the poverty line. For example, according to absolute measures, around 22% of India’s population is below the poverty line. Absolute poverty applies to less developed countries like India, wherever poverty is prevalent. With this, the number of poor people can be measured. Absolute Poverty can be measured through the concept of the Poverty Line. However, the “Poverty line” used to measure absolute poverty does not make difference between the very poor and other poor. Moreover, it does not take into account social factors that generate and are responsible for poverty, like illiteracy, ill health, lack of access to resources, discrimination, or lack of civil and political freedoms.

Difference between Relative Poverty and Absolute Poverty


Relative Poverty

Absolute Poverty


It is the relative level of poverty among individuals, communities, or countries. It indicates the total number of persons who are considered to be below the poverty line. 


It is most prevalent in developed nations. It is a widespread problem in developing nations.


It can be determined using the Lorenz Curve and Gini Coefficient. It can be determined using the Poverty line.


With the changes in the standard of living, it evolves with time. It maintains its consistency throughout time.
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Last Updated : 06 Apr, 2023
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