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ECON8901 Advanced Topics In Poverty, Public Policy And Development
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ECON8901 Advanced Topics In Poverty, Public Policy And Development
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Course Code: ECON8901
University: Australian National University
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Country: Australia
Question:
1. Discuss relative poverty concept and absolute poverty concept.
Answer:
Relative And Absolute Poverty Concept
Predominantly, poverty refers to a given level of economic deprivation. There are various measures of poverty thus making poverty a multi-dimensional concept. Noteworthy, absolute poverty denotes a situation whereby a person’s income is unable to sustain basic living conditions .Essentially, basic living conditions include access to housing food and shelter. However, relative poverty refers to a situation whereby a person’s income is below a certain set median incomes (Pettinger2017).Whereas absolute poverty is the same globally, relative poverty differs from country to country (Economic online 2017).The definition of relative poverty in the United State of America is different from the one in India due to the different median income rate. Relative poverty is measured using a standard percentage of median income which is set differently as per different economies. Primarily, the basis for relative poverty levels is the income measure (Sen 2013).The desire to measure poverty according to minimally accepted standards has led to the absolute and relative poverty concepts among other multidimensional approaches to poverty (Bourgignon & Chakravarty 2003).
According to Sen “despite the unanimity in favor of relative as opposed to an absolute view of poverty, there is good case for an absolutist approach”., goes to show the preference of relative poverty as opposed to(Sen 1983).Essentially, absolute and relative conceptualization of poverty is intertwined when it comes to capabilities. This is because absolute poverty adopts a relative approach when it comes to resources, commodity and income approach to measuring poverty (Sen 1983).Essentially, relative poverty is a measure of a person’s income as compared to an average standard of income in a given level thus the assertion that relative poverty is more specific geographically (Deaton 2005).Typically, both relative and absolute approaches to poverty are concerned as to the level of satisfaction of economic needs in terms of income and capabilities. However, under relative poverty, income and capabilities measures are approached differently from an absolute point of view .Usually absolute poverty is more of an individual measure as opposed to a social measure .However, relative poverty concept is more of a social measure of the economic livelihood of a person in comparison to other persons in the same context.
Predominantly, absolute poverty is a generalized idea of as to what poverty is whereas relative poverty is a more targeted approach to poverty due to the fact that is a comparison of personal income against a standard set in a given concept. All in all, relative and absolute concepts try to explain deprivation and survival levels from an economic point of view.
References
Bourguignon, F & Chakravarty, R.S. (2003).The measurement of Multidimensional poverty. Ophi.UK .Journal of Economics Inequality, Apr 2003:1.Available at https://www.ophi.org.uk/wp-content/uploads/Bourgignon-Chakravarty-2003.pdf[Accessed 20 May 2018]
Deaton, A.S. (2005).Measuring poverty in a growing world, Review of Economics and Statistics,87,1-19.Accessed on 20 May 2018]
Pettinger, T. (2017).Definition of absolute and relative poverty. Economics Help. [Online].Available at https://www.economicshelp.org/blog/glossary/definition-of-absolute-and-relative-poverty/[Accessed 20 May 2018]
Sen, A. (1983).Poor, relatively speaking.Berkeley.Edu. [Online].Available athttps://are.berkeley.edu/courses/ARE251/fall2008/Papers/sen83.pdf[Accessed 20 May 2018]
Sen, A. (2006).Conceptualizing and measuring Poverty.Univie.Ac. [Online].Available at https://homepage.univie.ac.at/fanny.mueller-uri/php/inequalities/wp-content/uploads/2013/10/Sen-Amartya-Conceptualizing-and-Measuring-Poverty.pdf[Accessed 20 May 2018]
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