Poverty and its Types
The World Bank officially describes poverty as ‘deprivation of well-being’. People living below the international poverty line ie. $1.90 per day is considered extremely poor. Poverty is a multifaceted phenomenon. It can be viewed from different perspectives; hence, there are six types of poverty:
- Objective Poverty: Visible poverty regarding income and assets proves the living conditions might not be decent.
- Monetary Poverty: Monetary Poverty is calculated solely based on financial inputs and resources.
- Relative Poverty: It defines whether someone lives in poverty or not through comparisons made among a surveyed population.
- Absolute Poverty: It indicates whether someone lives in poor conditions or poverty by calculating their income via the international poverty line.
- Non-Monetary Poverty: Deprivation from basic amenities other than financial such as schooling, healthcare, and basic food needs.
- Subjective Poverty: Subjective poverty is the individual’s perception of whether their living conditions are poor. This can vary from person to person, depending on the person’s self-satisfaction. It can only be calculated through direct surveys and house-to-house interviews.
Definition and Measurement of Poverty
The World Bank has defined poverty as the deprivation of basic amenities. It measures poverty using the Multi-Dimensional Poverty Index, World Bank Poverty Line, and World Poverty Clock. The World Bank provides open and accessible data on its websites about the deprived population, its increase or decrease, and trends in the past years.
People living below a poverty line don’t have enough to meet their basic needs. Countries typically define national poverty lines, and we use the lines of a group of the poorest countries to define the international extreme poverty line of $1.90 per day
In this article, we have discussed Poverty and its measurement by World Bank, along with poverty measurement techniques, and challenges.
Table of Content
- Poverty and its Types
- Measurement of Poverty by World Bank: Multidimensional Poverty Index (MPI)
- Definition and Measurement of Poverty: The Lorenz Curve and the Gini Coefficient
- World Bank Poverty Measurement Strategy
- World Bank Reports on Poverty
- Improving Poverty Measurement Techniques
- Challenges in the Measurement of Poverty