6/11/22, 12:08 PM Difference Between Absolute and Relative Poverty (With Table) – Learn Any Difference

Difference Between Absolute and Relative Poverty (With Table)

Many countries or groups of people come into the category of poverty as they cannot afford
necessities like proper food or hygienic living conditions.

However, poverty can be understood in two different types. The two main types are Absolute
and Relative Poverty. There are many differences between the two.

Absolute vs Relative Poverty

The main difference between Absolute and Relative poverty is that Absolute poverty
is when a person does not have enough money to survive a basic lifestyle. On the
other hand, Relative poverty is when a person can afford necessities but has a low
standard of living.

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Absolute poverty can happen because of many factors like debt, unemployment, natural
disasters, etc. A country’s economic growth has very little or no effect on the absolute poverty
which a person faces. The person who can’t afford food won’t be able to afford it even if the
country’s economy increases.

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Relative poverty is when a person or a household has all the necessities for life. However, the
overall lifestyle and standard of living are not up to the mark with other households in the
same area. Relative poverty can also be called “Relative deprivation.” It can happen because
of unemployment, diseases, pay inequality, etc.

Comparison Table Between Absolute and Relative Poverty

Parameters
of Absolute Poverty Relative Poverty
comparison

Absolute poverty is when a person Relative poverty is when one person can
Definition cannot get basic things like food, afford expensive things while another
clothes, and shelter. cannot.

Relative poverty is indicated by a

Standard of Absolute poverty is indicated by an
comparison between low, medium, and
living extremely low standard of living
high standards of living.

Method of Absolute poverty is measured by Relative poverty can be measured by

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Measurement using the poverty line. using the Gini-Coefficient and Lorenzo
Curve.

Quality of life under relative poverty can

Quality of life under Absolute be better or even very good as it is in
Quality of life
poverty is very poor. comparison to people who have an
amazing quality of life.

There is a chance that the effects or

Possibility of It is impossible to eradicate the
conditions of relative poverty can be
eradication effects of absolute poverty.
eradicated.

Absolute poverty can happen due Relative poverty can happen due to
to reasons like unemployment, or reasons like inequalities of job pay or
Reasons
natural calamities that destroy the lower level of education that can lead to
scope of income. different income levels.

What is Absolute Poverty?

Absolute poverty is often known as “Extreme poverty” or “Adject poverty.” People from
countries that face absolute poverty often are not able to have things like food, clean water,
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sanitary living conditions, or even education for children.

Absolute poverty can happen mainly because of very low income or no income. Since the
person facing absolute poverty has an extremely low source of income, they cannot afford all
necessary survival items.

In such conditions, children in such households can’t avail of education, and due to the lack of
education, they grow up being illiterate. It further leads to meager income, and thus the cycle
continues. Other than income, another reason that can impact the level of absolute poverty is
access to essential goods and services.

There are several methods like implementing mandatory education and providing employment
opportunities that can lead to an increase in the level of income. It in turn will bring a
decrease in the absolute poverty of any nation.

What is Relative Poverty?

Relative poverty, as the name suggests is the calculation of the standard of living of one
person in relativity to the standard of living of another person who lives in the same locality or

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region. Relative poverty is when a person can afford basic things, but cannot afford things
that a person from an upper class has.

A household that is not able to afford luxury when their neighbors can are said to be poor.
Relative poverty usually happens with people with lower middle class or middle class in
relativity to upper-middle class or upper class.

Relative poverty can happen due to several issues like low income or inflation in the area.
When both causes are combined it can lead to a huge gap in the standard of living of the
middle class and the upper class.

It is not impossible to get rid of relative poverty. It is possible to reduce the gap if the inflation
in the country reduces, and people can afford things without any reservation.

Main Differences Between Absolute and Relative Poverty

1. Absolute poverty is when a household can not afford even the necessities of life. On the
other hand, relative poverty is when a household can afford basic things but cannot afford
luxury commodities.

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2. Absolute poverty mostly prevails in developing nations. Whereas Relative poverty majorly
prevails in developed countries.
3. It is impossible to eradicate absolute poverty. While eradicating relative poverty is quite
possible if necessary measures are taken.
4. The standard of living under absolute poverty remains consistent over time. On the other
hand, it is possible to change the standard of living under relative poverty over time.
5. Absolute poverty is to be measured only with the help of the poverty line. However,
measurement of relative poverty cannot be done with the use of the poverty line, It has to
be measured by using the Gini-coefficient and Lorenzo Curve only.
6. People under Absolute poverty are usually below the poverty line. Whereas, people under
Relative poverty can be on the poverty line, and even in some cases above the poverty line.

Conclusion

Lack of education and employment can give rise to the chance of low income. Hence, it can
further lead to absolute poverty. Relative poverty can happen in two ways. It can either
happen voluntarily where a person has income sources but does not stay up to the standard
of those around him.

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