Distinguish between Absolute Poverty and Relative Poverty.

Question

Accepted Answer

| Basis | Absolute Poverty | Relative Poverty |
|---|---|---|
| Benchmark | A FIXED minimum standard of basic needs (e.g. a calorie/expenditure threshold) | A benchmark relative to the rest of society (e.g. a fraction of median income) |
| Depends on others' income? | No — independent of how well-off the rest of society is | Yes — defined entirely in comparison to others |
| Mainly used in | Developing countries (including India), where meeting basic survival needs is the urgent priority | Developed/high-income countries, where inequality is the more binding concern |
| Can it exist alongside rising average incomes? | Can fall even as average income rises, if enough households cross the fixed line | Can persist or widen even as average income rises, if the distribution stays or becomes more unequal |

> [!ANSWER]
> Absolute poverty measures a household against a fixed minimum standard of basic needs, independent of others' income; relative poverty measures a household's position compared to the general standard of living (e.g. median income) in its own society.

Q.Distinguish between Absolute Poverty and Relative Poverty.

Concept understanding — Meaning of Poverty — Absolute and Relative Poverty

Basis	Absolute Poverty	Relative Poverty
Benchmark	A FIXED minimum standard of basic needs (e.g. a calorie/expenditure threshold)	A benchmark relative to the rest of society (e.g. a fraction of median income)
Depends on others' income?	No — independent of how well-off the rest of society is	Yes — defined entirely in comparison to others
Mainly used in	Developing countries (including India), where meeting basic survival needs is the urgent priority	Developed/high-income countries, where inequality is the more binding concern
Can it exist alongside rising average incomes?	Can fall even as average income rises, if enough households cross the fixed line	Can persist or widen even as average income rises, if the distribution stays or becomes more unequal

Q.Distinguish between Absolute Poverty and Relative Poverty.

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