Differences Between Absolute, Relative, and Subjective Definitions of Poverty

Background of the research Poverty is a lack of essential foods, evacuation centers, medical care, and safety that humans generally consider necessary (Bradshaw, 2006). Poverty is a place where people live in a low living environment and face challenges in everyday life (McClelland, 2000). The measure of poverty is "poverty line risk", which refers to the "net disposable income" including the net income of all families after subtracting taxes and social contributions "full equivalent net". Amount of "main household income" (Buttler, 2013).

This definition already suggests that poverty is a relative concept. Therefore, many economists distinguish absolute poverty from relative poverty. Absolute poverty means situations in which individuals can not obtain food, housing, clothing which is the basic requirement of daily life. By contrast, we are talking about relative poverty when people can not participate in the usual acceptable standards for living in society. The government plays an important role in eradicating poverty. Most people think that should at least try to help those who need it most. However, there is still discussion on how to do this. In fact, there are many government policies that can reduce poverty. We will explain in detail four of the minimum wage law, social security, negative income tax, and in-kind benefits as follows.

When investigating the world's poor people, we first have to reveal the difference between relative poverty, absolute poverty and subjective poverty. People with relative poverty may not have sufficient living standards in their country, but absolute poverty people have little or no basic necessity like food. Subjective poverty is more relevant to that person's perception of that person's situation. North America and Europe are one of the poorest countries in the world, while Africa is the country with the largest number of poorest countries, but Asia is the poorest Asian country. From rising crime rates to adverse effects on physical and mental health, there are many adverse effects on poverty.

Poverty is often regarded as absolute or relative poverty. Absolute poverty refers to a series of criteria that do not contradict each other over time. The World Bank uses this definition of poverty to mark extreme poverty as being less than $ 1.25 a day, but poverty is less than $ 2 a day or $ 5 a day. Relative poverty is an explanation of poverty as a social definition and depends on social context. In general, relative poverty refers to the proportion of the population whose income falls below the median of a particular bond. Relative poverty indicators are used as public poverty rates for some developed countries and are measured by several different income disparity indices including Gini coefficient and Theil index. Measurement values ​​are usually based on individual annual income and often do not consider total assets.