20+ Difference between Absolute Poverty and relative poverty

When a person or family lacks the resources to meet even their most basic requirements, they are said to be poor.

Poverty is defined as the lack of resources, including money, that allows for fundamental human needs to be met, such as clean water, enough food, safe housing, medical care, an adequate education, and reliable means of transportation.

Both absolute and relative poverty exists. When people do not have enough money to meet their most fundamental needs, they live in absolute poverty.

Comparison Between Relative Poverty And Absolute Poverty

ParameterRelative PovertyAbsolute Poverty
DefinitionSuppose an individual or family’s living level is lower than that of the country as a whole. In that case, they are said to be living in relative poverty when measured against the average standard of living for the country as a whole. There is a possibility that not only individuals but even families are affected by this.When a person or family lives in extreme poverty, they are at a significant disadvantage and struggle to meet the demands of even the most essential components of their day-to-day existence. This may make it very difficult for them to escape the cycle of poverty.
What it measuresThe Lorenzo curve and the Gini coefficient are two essential tools that may be used to compare different poverty levels. Both of these tools can be found in the Lorenzo curve and the Gini coefficient. The table that follows includes both of these useful resources for your perusal.The level at which one is considered to be living in poverty is what is used to carry out the calculation in this context.
Considers/ignoresIt takes into account, as a component of its research, both the recent economic victories of the nation as a whole and the rise in the quality of life throughout the country. This is done so to understand the relationship between the two better.It does so without recognizing the presence of these inequalities in wealth and living standards throughout the globe, and it does so without making any allowances for the fact that different regions of the world have dramatically different levels of both wealth and quality of life.
Poverty lineThe extent to which it can be said that the people of a country are living in relative poverty is directly related to the health and vitality of the economic system of that nation, regardless of whether or not that economy is robust or fragile.Over the course of many years, the bulk of the wealth gap that separates those doing well for themselves and others who are always scraping and clawing to make ends meet has mostly stayed relatively intact.
EliminationDespite this, it is quite simple to decrease the severity of the event’s impact on one’s life in some way. This is something that can be accomplished in a variety of different ways, and it is something that is something that is something that is something that can be accomplished to some extent.There will never be a point in the lifetime of any individual who is now alive in which there is a time when severe poverty does not exist anywhere on the surface of the world.

Major Difference Between Relative Poverty And Absolute Poverty

What exactly is Relative Poverty?

When someone is considered to be living in “relative poverty,” they do not have enough money to meet even the very minimum needs of their society.

Those who are so financially strapped that they cannot afford even a fraction of the necessities most of their fellow citizens enjoy are said to be “poor.”

Poverty is hereby defined in terms of the relative distribution of a person’s or a family’s income or consumption compared to that of another person’s or family’s or nation’s.

Key Difference: Relative Poverty

  • When comparing two persons, relative poverty does not consider their individual biology but rather looks at how they compare to others in their immediate surroundings. 
  • It is ignored because even if a person meets his needs, they would still be classified as poor according to relative poverty measures. 
  • People in relative poverty are better off than those in absolute poverty, but they still can’t afford to live at the same level as the rest of society. 
  • Measured Using the Gini-Coefficient and Lorenzo Curve. Attempts to eradicate it have little chance of success. 
  • Access to health care improves people’s quality of life even a little. Indicates a person’s economic standing about that of the general population. 
  • An individual is considered to be living in relative poverty if their living level is much lower than what is considered to be the bare minimum by most members.
  • As wages rise and living standards improve, poverty levels fluctuate over time. The Gini Coefficient and the Lorenz Curve are two ways to quantify relative poverty.

What exactly is Absolute Poverty?

The federal poverty line serves as a useful benchmark for measuring the severity of poverty. An individual or family is considered poor if their annual income is at or below the federal poverty level.

Indicative of a lack of resources essential to an individual’s physical and social well-being, such as food, water, clothes, and shelter, as well as access to amenities like sanitation, education, medical care, information, etc.

Key Difference: Absolute Poverty

  • It is considered that a person is living in extreme poverty if they lack the resources to provide for their basic needs. 
  • In determining whether or not someone is living in absolute poverty, income is taken into account. Absolute cannot be eliminated in its entirety. 
  • However, absolute poverty does not account for other factors contributing to inequality, such as low quality of life. 
  • The idea overlooks the fact that people also have vital social and cultural requirements. A value below the poverty line was used for this calculation. 
  • A family or household lives in absolute poverty if their income is so low that they cannot afford even the most basic necessities of life. 
  • When referring to poverty, absolute poverty is defined as having an income that is below the international poverty line. In general, life is not very satisfying right now. 
  • There has never been a moment when absolute poverty did not exist. The poverty line is used as a benchmark against which extreme poverty may be assessed. 
  • While absolute poverty cannot be eliminated, it is feasible to eradicate poverty on a relative scale. In many third-world nations, people live in extreme poverty. 

Contrast Between Relative Poverty And Absolute Poverty


  • Relative Poverty – It is claimed that a person is earning “above minimum wage but below median” when their hourly remuneration is greater than the national minimum wage, but their yearly income is still between 50 and 60 percent lower than the national median income.

    Because of this, there is now what is referred to as “relative poverty,” which is a comparative measurement of economic hardship.
  • Absolute Poverty – It is widely accepted that a person is considered to be living in poverty if they cannot make enough money to meet all of their basic expenses while making an adequate effort to do so.

    This equates to a daily expenditure of $1.9 for each individual, which has been determined to be acceptable by the United Nations’ criteria.

What it considers:

  • Relative Poverty – Even though they cannot maintain a standard of living comparable to that of most people, they may be in a better position than those currently surviving in extreme poverty conditions.

    This is because the vast majority of people cannot maintain a standard of living comparable to that of the vast majority of people.
  • Absolute Poverty – Only the most essential characteristics of a person’s living level are considered while attempting to construct a definition for absolute poverty.

    The populace’s needs are not considered, including their cultural traditions, social lives, and mental health.

Living standards:

  • Relative Poverty – People who live in situations of relative poverty have a significantly greater quality of life when compared to those who live in circumstances of absolute poverty.

    Those who live in absolute poverty have a much worse quality of life than those who live in relative poverty.

    Regardless of this, they cannot afford a level of living comparable to that of the rest of the nation as a whole.
  • Absolute Poverty – When people find themselves in precarious situations like these, their ability to maintain even the most fundamental quality standard in their life is at its very lowest point.

    This is because they must concentrate on surviving rather than improving their quality of life.


  • Relative Poverty – A comparison of the incomes of two families (or individuals) living in the same place is what is meant when people talk about “relative poverty.”

    However, a comparison of the criteria these families or people need does not necessitate this comparison.
  • Absolute Poverty – The amount of money that an individual has access to at the time that they are being evaluated is one of the factors that is taken into account in the process of assessing whether or not that individual is living in a state that is considered to be one of the most severe forms of poverty.

    This is because the very definition of living in a state of abject poverty is being denied even the most essential pleasures and comforts, which explains why this is the case.


  • Relative Poverty – When evaluating an individual’s level of relative poverty, it is vital to consider not just the monetary demands but also the social requirements.

    Failing to do so might be misleading. Should you fail to do so, you will get a rating that is not accurate.

    If you cannot do so, you will be assigned a rating that does not accurately represent your capabilities.
  • Absolute Poverty – In contrast, absolute poverty takes into account a much smaller subset of the factors that contribute to an individual’s quality of life, in contrast to relative poverty, which takes into account each and every one of these factors. Relative poverty, on the other hand, considers all of these elements.

Frequently Asked Questions (FAQs)

Q1. Where do you find the highest rates of relative poverty?

Only five nations were home to 368 million of the world’s 736 million people who were classified as living in severe poverty in 2015.
This accounted for half of the global total.

India, Nigeria, the Democratic Republic of the Congo, Ethiopia, and Bangladesh are, in decreasing order, the five nations that are home to the greatest number of people living in abject poverty.

Q2. Where do you draw the line between absolute wealth and relative destitution?

Eurostat monitors poverty across the European Union using a line called the relative poverty line.

The United Nations established this measure. This line is described as the line that is closest to the relative poverty line in each country, and it is calculated as being sixty percent of the median daily consumption or income for each individual.

Q3. How should the poverty level be measured about that in other places while doing an analysis?

Suppose a person’s household equivalent income is less than 60 percent of the median household equivalent income of the Member State in which they live. In that case, that person is considered to be “at risk of poverty.”

This portion is based on the median income for a family in the United States with the same number of members as the family discussed here.

Q4. How can increased economic development contribute to the reduction of absolute poverty?

A lower unemployment rate is a direct result of economic growth’s ability to provide more work possibilities.

A lack of work opportunities, including unemployment, is one of the primary contributors to relative poverty.

The minimum wage is being raised so that it is more in line with the average earnings. Income is redistributed via the use of progressive taxation.

Q5. What are the contributing variables that lead to complete destitution?

The buildup of debt, a rise in the world’s population, the occurrence of natural disasters or armed conflicts, and the use of child labor are the fundamental factors that lead to complete destitution.

An example of extreme poverty is a child of 12 years old who has never been to a doctor’s office or attended school in their whole life. He has never been presented with one of those possibilities.

Q6. What negative consequences can live in total destitution have on a person’s health?

According to the World Health Organization, people who live in poor conditions “are exposed to greater personal and environmental health risks; as a result, they have a higher risk of illness and disability;

in addition, they are less well-nourished; they have less information, and they are less able to access health care;” as a result, they have a higher risk of becoming disabled (WHO).

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