Economics – Economic development - Poverty | e-Consult

The table clearly illustrates the fundamental differences between absolute and relative poverty. Absolute poverty is defined by a fixed, universal standard of basic needs – food, shelter, etc. The measurement is based on a poverty line representing the cost of survival. It's prevalent in developing nations and conflict zones where basic needs are unmet. A key strength is its clarity and ease of cross-country comparison. However, a weakness is its potential to be culturally biased, as the definition of 'basic needs' can vary.

Relative poverty, in contrast, is defined in relation to the living standards of a particular society. It's measured by comparing an individual's income to the median income or a percentage thereof. It's more common in wealthier countries with significant income inequality. A strength is that it reflects the well-being of a society and highlights disparities within that society. However, a weakness is the difficulty in setting a suitable threshold for relative poverty, as what is considered 'relative' can be subjective and vary across societies. The table highlights that absolute poverty focuses on survival, while relative poverty focuses on social inclusion and opportunity.