Different Measures of Poverty-Relative and Absolute

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Example 1- Relative Poverty Which Country is Poor-India or USA? INDIA USA India is relatively poor compared to USA Which Country is Poor-India or Pakistan? INDIA PAKISTAN Pakistan is relatively poor compared to India What is Relative Poverty Relative Poverty refers to the poverty of people in comparison to other people, regions or nations. India is Rich compared to Pakistan but poor compared to USA (So Poverty is Relative, it is in comparison to others) Example 2-Relative Poverty in Country like India Rich Very Few Middle Class Large No Lower Class Very Large no Lower Class Very Large no Lower Class Very Large no Middle class are poor compared to Rich class Poor class are poor compared to Middle class This is Relative Poverty We can say Disparity of income and its distribution is associated with Relative Poverty In which Economy do we find Relative Poverty- Capitalist or Socialist Capitalists Economy Private Business Run by Private Sector People owning this business become rich People working as employees remain poor There is High inequality There is Relative Poverty (People poor compared to others) Socialist Economy Govt. Business Run by Government Since Business owned by Govt People work in these business as employees There is Less inequality There is not Relative Poverty (All people have similar level of income) Different Types of Poverty Relative Poverty A Income 50/Day B Income 60/Day A is Poor Compared to B What is Relative Poverty It is the poverty of people in comparison to other people, regions or nations. It is found in Capitalist and Mixed Economies where business run by Private sector Absolute Poverty A Income 50/Day B Income 60/Day Both A and B are Poor If Income Required to Maintain Minimum living Standard=Rs 100/day What is Absolute Poverty It refers to condition in which income of people is not enough to afford minimum standard of living It is found in Developing and Underdeveloped Countries Which type of Poverty found in India-Relative or Absolute? Relative Property Relative Poverty refers to the poverty of people in comparison to other people, regions or nations. It is found in Capitalist and Mixed Economies where business run by Private sector Absolute Poverty It refers to condition in which income of people is not enough to afford minimum standard of living It is found in Developing and Underdeveloped Countries India is a Mixed Economy There is high inequality Some people are very rich While majority are poor or Middle class So there is Relative Poverty India is a Developing country Many people still do not earn enough to afford a minimum standard of living So there is Absolute Poverty Which Type of Poverty in India? India is a Mixed Economy as well as Developing Country Hence both Relative and Absolute poverty found in India