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What is difference between Absolute Poverty and Relative Poverty ?

Last updated date: 16th Jul 2024
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Both are types of poverty but yet got the difference among them. First, let us understand absolute poverty. It refers to such phenomenon in which an individual cannot afford a basic subsistence level i.e. is insufficient in basic necessities of life like shelter, food and clothing. We all know that income and food consumption is the most important criteria to check on the well-being of an individual. It is also used to define what we call as a poverty line. Absolute, also known as extreme poverty is the type of poverty seen in third world countries. Extreme poverty also means that people lack access to the basic resources needed for survival. Absolute poverty sufferers tend to be malnourished due to lack of access to food. They also stereotypically do not have access to clean water, proper housing, sufficient clothing, as well as health-care and medicine. 

Now, let’s looks into the concept of relative poverty. It is very different from the former one. Relative poverty can be well-defined as a person’s way of life and income being significantly less than the general standard of living in the country or region in which they live. It is mostly seen in developed countries. Even though extreme poverty does exist in small numbers within developed countries. The threshold for measuring relative poverty is around 40-70% of the national median income. This type of poverty results in a significant struggle for those in relative poverty to lead a normal life and to participate not only in normal economic activities but social and cultural activities as well. We assume cases where people in relative poverty group might be living above subsistence level. More precisely such people are able to maintain a basic minimum living standard but then there is no way we can say their conditions are good enough in regards to the society we live in.

Thus, one can see the difference between the two concepts very clearly. The absolute level of dispossession (absolute poverty) and culturally defined standard of living (relative poverty).