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When evaluating poverty in statistics or economics there are two main measures: absolute poverty which compares income against the amount needed to meet basic personal needs, such as food, clothing, and shelter; [2] secondly, relative poverty measures when a person cannot meet a minimum level of living standards, compared to others in the same ...
According to a 2008 report by the Organisation for Economic Co-operation and Development (OECD), the rate of poverty in Canada, is among the highest of the OECD member nations, the world's wealthiest industrialized nations. [8] There is no official government definition and therefore, measure, for poverty in Canada.
Thus, a discussion of poverty in an advanced economy has to take into account that absolute poverty might not be readily applicable to people in that economy. [3] Relative poverty refers to individuals or entities that do not meet minimum standards versus others in the same area, place and time. A lot of poorer economies can have both absolute ...
[4] [5] There are many working definitions of "poverty", with considerable debate on the most accurate definition of the term. Lack of income security, economic stability and the predictability of one's continued means to meet basic needs all serve as absolute indicators of poverty. Poverty may therefore also be defined as the economic ...
When measured, poverty may be absolute or relative.Absolute poverty refers to a set standard which is consistent over time and between countries. An example of an absolute measurement would be the percentage of the population eating less food than is required to sustain the human body (approximately 2000–2500 calories per day).
Relative poverty measurements, unlike absolute poverty measurements, take the social economic environment of the people observed into consideration. It is based on the assumption that whether a person is considered poor depends on her/his income share relative to the income shares of other people who are living in the same economy. [ 29 ]
The international poverty line is designed to stay constant over time, to allow comparisons between different years. It is therefore a measure of absolute poverty and is not measuring relative poverty. It is also not designed to capture how people view their own financial situation (known as the socially subjective poverty line). [23]
Using data from the Luxembourg Income Study, Bradley et al. and Lane Kenworthy measure the poverty rates both in relative terms (poverty defined by the respective governments) and absolute terms (poverty defined by 40% of United States median income), respectively. Kenworthy's study also adjusts for economic performance and shows that the ...