Difference Between Relative Poverty and Absolute Poverty

Oct 2, 2022 · 6 min read ·

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India is a developing country, and many families and individuals come under the poverty line. The criteria of the poverty line are made so that the number of individuals and families can be measured between other countries. And to do so, the two said terms are introduced – Relative Poverty and Absolute Poverty.

Relative Poverty vs Absolute Poverty

The main difference between Relative Poverty and Absolute Poverty is that Relative Poverty can be stated when a family is destitute of the norm living standards decided by the society they live in, while Absolute Poverty is when there is a situation that a family or a person lack proper income and proper basic standards of living.

Relative Poverty depends on the economy of a country. It measures the number of people who are financially less stable but can afford a basic living and a person or family who is financially unstable and cannot afford a basic living. It is said to be that it can never be eradicated.

Absolute Poverty is measured based on a person or a family who cannot afford basic living standards such as – food, housing, and clothing, etc. This measuring standard helps in making a comparison between different countries. Also, it is said that Absolute Poverty can be removed completely.

Comparison Table Between Relative Poverty and Absolute Poverty

Parameters of Comparison	Relative Poverty	Absolute Poverty
Definition	It can be defined as when a person or family is deprived of the custom living standard of the society they live in.	It can be defined as the lack of income and basic standards required for living.
Concept	It was conceptualized by Prof. Peter Townsend.	It is traditionally accepted.
Cause	The main cause of relative poverty is the difference in income.	The cause of absolute poverty is the low PCC, low PCI, lack of income, etc.
Nature	Relative Property is said to be universal and is present in every country.	Absolute Poverty is not universal and also not necessary to be present in every country.
Method of Mitigation	Relative Poverty can be reduced if the income gap between rich and poor gets reduced.	Absolute Poverty can be reduced if there is a reduction in population, increase in income, employment increment, etc.
Results	It results in inequality.	It results in mass poverty.
Reference to Poverty Line	The people coming under Relative Poverty lives above, below, or on the poverty line.	The people coming under Absolute Poverty lives under the poverty line.

What is Relative Poverty?

Relative Property is well-defined as the condition where a person and a family lack the minimum amount to live the basic standard of living in society. As compared to absolute poverty, it is not that extreme. The idea of Relative Poverty was given by Professor Peter Townsend. The main reason behind the increase in Relative Poverty is the regular increase in the income gap between rich and poor.

Relative Poverty is stated to be universal and is used as a measure to compare between other countries, which means it is present in every country. The people falling under the criteria are said to be slightly to be above, on, or below the poverty line.

There must be a reduction in the gap of income between the rich and poor people to reduce the effect of Relative Poverty because nowadays, richer are getting richer and poorer are getting in more worst conditions. As it is an indicator for measurement, therefore, it is used as the economic status of the people—relative Poverty changes with the economy of the country.

The standard of Relative Poverty varies from place to place. And the people living in Relative Poverty are said to be in the middle class but still is not able to meet the basic livelihood custom things; therefore are said to be in the lower middle class.

What is Absolute Poverty?

Absolute Poverty is defined as the term associated with the individuals and families living under the poverty line. Absolute Poverty depends on the two criteria given below:

Minimum Calories Consumption Criteria – It is stated that when a person in rural areas is not able to consume 2400 calories per day and 2100 calories per day in urban areas, it is called the criteria for minimum consumption calories.

Minimum Consumption Expenditure Criteria – It is stated that the average amount of expenses a person can do per day. The minimum amount for it is fixed by the government separately for rural areas and urban areas. Also, the amount fixed for the criteria is flexible annually or biannually depending on inflation and other factors.

The concept of Absolute Poverty is accepted worldwide. And some of the cause of Absolute Poverty is the low Price-Consumption Curve (PCC), low Per Capita Income (PCI), lack of income, etc. It is believed that, unlike Relative Poverty, Absolute Poverty is not a universal term and is not necessary to be present in every other country. It can also be reduced by controlling the count of the population, increasing the number of employed people which will ultimately increase the income.

Main Differences Between Relative Poverty and Absolute Poverty

Relative Poverty can be described as when a person or family is unable to cope with the norms of society, while Absolute Poverty is the shortage of basic living standards of a person or a family.

The concept of Relative Poverty was given by Professor Peter Townsend, while the conceptualization of Absolute Poverty was already traditionally accepted.

The difference in income is the major cause for Relative Poverty, while the shortage of income, PCC, PCI, etc., is the cause of Absolute Poverty.

The nature of Relative Poverty is universal and is accepted by every country, while Absolute Poverty is not a universal thing and is not a necessary thing to be accepted by every country.

Relative Poverty is said to result in a higher level of inequality among others, while Absolute Poverty is said that results in mass poverty (it will only happen when about 50% or more population comes under the poverty line).

Regarding the poverty line, people under Relative Property live above, below, or on the line of poverty, while in the case of Absolute Poverty, they live below the poverty line.

Relative Poverty can be reduced by the difference in the gap of income of rich and poor, while Absolute Poverty can be reduced if there is a control on population, increment in employment, income, etc.

Conclusion

Eradication of poverty is something every country wants. It is one of the factors that helps a developing country to embark on a journey towards a developed country. Poverty not only focuses on income and consumption but also, it focuses on society and politics.

The two above terms – Relative and Absolute Poverty is related to it. The shortage of income, lack of requirement of basic daily needs such as – clothing, food, shelter, etc. Even the Government has also taken some steps forward to eradicate poverty. They have inaugurated many schemes and programs like – The Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA), Pradhan Mantri Awaas Yojana-Gramin (PMAY-G), Food Security Programme, Skill India Programme, and many more.

References

https://content.iospress.com/articles/journal-of-economic-and-social-measurement/jem00192

https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1475-4991.2000.tb00954.x

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