Relative and Absolute Poverty

Poverty can be defined as an economic condition when basic needs of an individual (including food, water, clothing and shelter which are necessary to survive), can not be satisfied. Thus, poverty is the situation when an individual has very little money and material things in possession. Currently, poverty is among the most topical problems of our society. Poverty level can be determined using the concept of poverty threshold, which is defined as minimal income allowing an individual to satisfy above mentioned basic needs.

There are several models which can be used in order to measure poverty of a certain group of people. Those concepts include absolute poverty and relative poverty. Absolute poverty gives a picture about the number of people in a social group, who live for the income below poverty threshold. In other words, it shows the number of people or families, who can not afford their basic needs. In particular, the model of absolute poverty can be used for measuring the amount of homeless or starving people, etc.

Relative poverty is principally different concept. It can define the extent to which incomes of poor groups of people go below the poverty threshold, or compare the incomes of certain social groups. In other words, relative poverty is used to measure any sort of inequality of incomes in social groups. Comparison of total wealth of the people living below poverty threshold with generated wealth of millionaires in a country or a social group is an example of using this model.

The main difference between these two concepts is their view on poverty. Absolute poverty is always measured according to the standards and conditions which are clearly set and consistent in time. Absolute poverty refers to poverty threshold which is independent of place and time. On the other hand, relative poverty model is used to compare people’s incomes not to the certain fixed point (poverty threshold), but to the incomes of the others. Therefore, it is more oriented on social circumstances and dynamics.
References

Poverty. (2007). Tiscali UK. Research Machines Plc. Retrieved November 24, 2007, from the World Wide Web: <http://www.tiscali.co.uk/reference/encyclopaedia/hutchinson/m0021818.html>.