Introduction to Poverty-Related Development Studies: How to Define Poverty?

Absolute and Relative Poverty 1

Estimates by the World Bank show about 1.4 billion people living below the international poverty line of US$ 1.25 a day in 2005, equivalent to more than one fourth of the developing world's population. Roughly 1 billion people have to live with 1.25 to 2 $ PPP per day and person (moderate poverty line). Poverty incidence declined from 52 percent of the global population in 1981 to 42 percent in 1990 and 25 percent in 2005. That proportion is expected to be 15 percent by 2015. (Poverty brief March 2010, Worldbank)
Most of those extremely poor people live in South Asia, but their proportion is highest on the African continent where about 45% of the population was considered to be living in extreme poverty in 2001.

People living with less than 1$ a day

Click on the link in the right-hand column to get to the Worldbank's poverty related homepage with various topics. By clicking on that homepage's link to Statistics and Indicators you will find data and maps illustrating poverty issues.

Poverty is a complex phenomenon that is difficult to define but one which must nevertheless be defined if we want to be able to identify the people living in poverty and undertake actions to alleviate their situation.

Poverty related issues at WB

Click on the animation and the table in the right-hand column to see some of the dimensions of poverty:

These dimensions make reference to different analytical approaches. Similar elements (i.e. food, health, skills) are therefore listed under several approaches.

Dimensions of Poverty

The definitions of the World Bank draw a line between those who are considered poor and those who are not. This definition refers to what we term absolute poverty. This type of definition sets a standard that is applicable to all countries and remains fixed over time; it distinguishes between the poor and the non-poor. The standard can be expressed in

monetary terms such as the one or since recently the 1.25 dollar line mentioned above, but it can also refer to
non-monetary standards such as the amount of calories per day necessary to sustain a person (approximately 2000-2500 calories per day for an adult male) or to a set of goods and services a person must possess or have access to (i.e. shelter, drinking water…) (World Bank 2001).

Absolute definitions of poverty have the advantage of providing data that make comparisons possible between countries. They also give clear indications of the measures that have to be undertaken in order to improve the situation of poor people. This is usually done by implementing policies that allow people to reach the standard they are currently unable to attain. For instance, if more people earn more than 1.25 dollars a day, there will be less poverty according to this definition.

	Dimensions table [76KB]
	Handbook of Poverty and Inequality (Chapter 1) [141KB]

However, absolute definitions of poverty can be criticised because they tend to equate many different poverty situations across the world. Depending on how the standards are set, they may well either exclude some people who may be considered as poor in specific situations or, inversely, consider people as poor who may not think of themselves as poor. For instance, in Western Europe, there are very few people living on less than two dollars a day, yet there is a far greater amount of people who feel poor or whom their governments consider to be poor.