DEFINITIONS AND MEASUREMENT OF POVERTY

The eradication of poverty has been declared by the United Nations World Summit
for Social Development in 1995 as the unfinished business of the 21 st century. The issue
was also topmost in the agenda at the United Nations Millennium Summit in New York in
September 2000.
The word poverty is an age-long concept, identifiable with socio-economic setting of
human race in all generations.
What is poverty?
The presentation in this lecture is largely introductory and after students have
studied the lecture, they should be able to

explain different meanings of poverty

identify the various aspects of poverty

have insight into some definitions of poverty

state some elementary measures and indicators of poverty

Aspects of Poverty
There is no unanimously accepted definition of poverty. As a matter of fact it is
almost never defined in itself, but through other concepts, such as growth, well-being,
exclusion or equity. A basic feature of the concept of poverty is its complex and
multidimensional nature which makes the plurality of definitions is inescapable.
According to English dictionary, the word poverty refers to the state of being
very poor. The word can be understood to mean the whole gamut of deprivations which
may be economic, social, spiritual, political, cultural or in fact environmental.
Human poverty, on the other hand, describes the conditions of low health and low
education.
The multidimensionality of poverty has been stressed and succinctly expressed in
the Copenhagen Declaration on Social Development in the following manner:
Poverty has various manifestations, including

lack of income and productive resources sufficient to ensure sustainable

livelihoods;

hunger and malnutrition;

ill health;

limited or lack of access to education and other basic services;

increased morbidity and mortality from illness

homelessness and inadequate housing;

unsafe environments; and social discrimination and exclusion

lack of participation and exclusion.

lack of participation in decision-making and in civil, social and cultural life.

[World Summit for Social Development, Copenhagen, 1995]

Apparently, the multidimensional nature of poverty is what has given rise to the plurality
of definitions and for now; the conceptualization of definition of poverty is still in
progress.
Definitions of Poverty
Any discussion of social class and mobility would be incomplete without a discussion
of poverty, which is defined as the lack of the minimum food and shelter necessary for
maintaining life. More specifically, this condition is known as absolute poverty.
According to the definition of relative poverty, the poor are those who lack what is
needed by most people to live decently.

The first conceptual approach to poverty is expressed in terms of household income or

consumption. By this definition, people are considered poor if and only if they do not
have sufficient income to enjoy a certain level of well-being. In the operational sense, a
person is considered poor if his income or consumption is below a predetermined poverty
line, which will be explained shortly.
Another definition, developed by UNICEF identifies certain basic needs, such as food,
clothing and shelter that must absolutely be fulfilled to keep people out of poverty.
Poverty, in this sense, is defined as deprivation in the material requirements for minimally
acceptable fulfillment of human needs, including food. This deprivational concept goes
far beyond a lack of private income: it includes the need for basic health and education
and essential services that must be provided by the society to prevent people from falling
into poverty.
A further attempt to have a more comprehensive definition of poverty comes from the
UNDP. The definition draws on several other definitions, integrates their fundamental
elements and enhances the process with a focus on the concept of a lack of capabilities.
The concept, aptly referred to as human poverty, defines poverty as a state of deprivation
or denial of the basic choices and opportunities needed to enjoy a decent standard of
living, to live a long, healthy, constructive life and to participate in employment and in
the social, political and cultural life of the community.
Causes of poverty:
Poverty is an exceptionally complicated social phenomenon, and trying to discover its
causes is equally complicated. The stereotypic (and simplistic) explanation persists
that the poor cause their own povertybased on the notion that anything is possible in
the world.
Some theorists have accused the poor of having little concern for the future and
preferring to live for the moment;
Others have accused them of engaging in selfdefeating behavior.
Still other theorists have characterized the poor as fatalists, resigning themselves to
a culture of poverty in which nothing can be done to change their economic
outcomes. In this culture of povertywhich passes from generation to generationthe
poor feel negative, inferior, passive, hopeless, and powerless.

More recently, sociologists have focused on other theories of poverty. One theory of
poverty has to do with the flight of the middle class, including employers, from the
cities and into the suburbs. This has limited the opportunities for the innercity poor to
find adequate jobs. According to another theory, the poor would rather receive welfare
payments than work in demeaning positions as maids or in fastfood restaurants. As a
result of this view, the welfare system has come under increasing attack in recent
years.
Again, no simple explanations for or solutions to the problem of poverty exist. Although
varying theories abound, sociologists will continue to pay attention to this issue in the
years to come.

Measures and Indicators of Poverty

Economists have differed as to whether poverty should be measured in absolute sense,
defining poverty as people falling below some fixed minimum income or consumption
level; or whether it should be defined in relative terms, so that poverty means inability to
afford what average people have. If an absolute measure is accepted, it is at least
conceivable to have everybody lifted above the poverty line whereas if poverty is
measured in relative sense, some people will at least fall below the so called poverty line,
which means the poor will always be with us.
Poverty line is a basic measure and an instrument for identifying and measuring income
poverty. It is defined as an arbitrary income measure, usually expressed in constant
dollars (e.g. $1 per day), used as a basis for estimating the proportion of a countrys
population that exists at bare level of subsistence. Based on household income or
consumption, poverty lines quantify absolute poverty in monetary terms and characterize
people in terms of their monetary income or consumption, particularly of food. Thus, a
poverty line is just a cut-off line (or threshold) used to distinguish between poor and
non-poor households
Setting a poverty line permits the calculation of the following poverty indicators

poverty rate or incidence of poverty

depth of poverty or poverty gap

severity of poverty
The poverty rate or incidences of poverty, is simply an estimate of the percentage
of people living below the poverty line.
The depth of poverty is measured as the average distance below the poverty line,
expressed as a percentage of that line. It is also called the poverty gap as it shows
the average distance of the poor from the poverty line.
The severity of poverty is measured as a weighted average of the squared distance
below the poverty line, expressed as a percentage of that line. The weights are
usually given by each individual gap. Since the weights increase with poverty, this
measure is sensitive to inequalities among the poor.

One final measure of poverty, credited to the United Nations Development Programme

(UNDP) in its 1997 Human Development Report, was introduced against the background
of dissatisfaction with the dollar a day World Bank income measures. As articulated in
the Report.
Poverty has many faces. It is much more than low income.
It also reflects
Poor health and education,
Deprivation in knowledge and communication,
Inability to exercise human and political rights
And absence of dignity confidence and self-respect
[UNDP, Human Development Report, 1997].
Hence, in place of the World Banks notion of income poverty, the UNDP developed a
measure of human poverty that is, human poverty index (HPI). The HPI constructed is a
multidimensional measure of poverty, incorporating three key deprivations in respect of
survival, knowledge, and economic provisions.
1. The deprivation in longevity (survival) is measured as the percentage of people not
expected to survive to age 40,
2. The deprivation in knowledge is measured by the percentage of adults who are
illiterate.
3. The third deprivation, economic provisions, relates to a decent living standard. It
is represented by a composite of three variables, namely the percentage of people
without access to safe water, the percentage of people without access to health
services, and the percentage of malnourished children under five.
The measure, HPI, provides a quantitative and more comprehensive poverty indicator
when compared to income poverty index. Income poverty, no doubt, needs to be
measured, but income alone is too narrow a measure. Thus, HPI developed by UNDP,
provides a more robust and broad measure of poverty indicator, summarizing the extent
of poverty along several dimensions. The index makes possible a ranking in relation to a
combination of basic deprivations and also serves as a useful complement to other
measures of poverty and human deprivation-including income poverty. A shortcoming of
HPI, however, is that it is somehow aggregative as it is not possible to associate the
poverty incidence with a specific group of people or number of people.
Concluding Remarks
Poverty is a mass phenomenon in most of the developing and
underdeveloped countries. It is not really a simple and straightforward concept; rather it
is complex, dynamic and multi-dimensional in nature. The phenomenon presents itself as
a situation of pronounced deprivation of all kinds which could be material or nonmaterial in nature; and income of human poverty.

As far as operational definition is concerned, the understanding of poverty has evolved

considerably from a simple notion of low income and low consumption, characterized by
poor nutrition and poor living conditions. It is becoming more apparent that poverty is
far-more complex than material deprivation with mere emphasis on income. This
traditional notion of income poverty has thus given way to the idea of human poverty.
The concept of human poverty is an attempt towards having a comprehensive
understanding of poverty, having realized the multidimensionality of the phenomenon.
In contrast to income poverty, human poverty as developed by UNDP encompasses both
monetary aspect (i.e. inadequate income and consumption) and aspects related to the
accessibility of essential services and lack of capabilities.
The problem of poverty is an overall development problem that should be analysed from
the perspective of sustainable human development paradigm. The relevant indicators in
the context are therefore the Human Poverty Index (HPI) and the related measure of
human development, the human development index (HDI).
The adoption of this approach will provide an effective instrument for moving
beyond the narrow framework of income poverty to a comprehensive assessment of
human poverty in the country.