What is difference between Absolute Poverty and Relative Poverty?
Absolute Poverty:Absolute Poverty is when people do not have enough money to meet the basic threshold that is needed for survival. People fall below this line and do not have enough money to buy food, shelter, clothing etc. that is needed for survival.Example: a person unable to fulfil the basic necessities of life
Realtive Poverty:Relative Poverty is when people are poor when compared to others around them, but may still have enough money to survive. It is based on the cultural environment around them, not on a basic amount necessary for all humans to survive.Example: Zambia, Uganda are poorer countries than USA..
relative poverty is calculated on the basis of income earned by the individuals whereas absolute poverty is the actual number of people living below poverty line
relative poverty changes frequently from one area to another as compared to absolute poverty
absolute poverty is better for the calculation of poor as it gives the exact idea of the people living below the poverty line and it follows the criteria of poverty line for differentiation among the people as poor and non-poor...
Relative Poverty: 1. It refers to poverty of people relative to other people,regions or nations.
2. When we say India is relatively poor,then it means it is in comparision with other country according to the percapita income.
3. Within India,relative poverty is calculated by the help of LORENZ curve and Ginni Co-efficient.
4. India is relatively one of the poorest countries as well as its percapita income is less than one dollar per day.
Absolute Poverty: 1. It refers to the total number of people below the poverty line.
2. This concept has relevance for less developed countries and no relevance with other developed countries.
3. Within India,absolute poverty is calculated with the help of poverty line.
4. In India,25 % of the population is absolutely poor.