Question

What is the poverty line?

Short answer

The poverty line is a threshold below which an individual or family is considered to be living in poverty, defined as the minimum income level necessary to meet their basic needs such as food, clothing, and shelter. It can vary depending on the cost of living, economic conditions, and other factors. The World Bank's international poverty line, currently set at $1.90 per day, is used to measure extreme poverty globally. Understanding the poverty line is important for measuring poverty, identifying vulnerable populations, guiding policy-making and resource allocation, and raising awareness about poverty eradication and sustainable development.

Step-by-step solution

Definition of the Poverty Line

The poverty line is a threshold below which an individual or family is considered to be living in poverty. It is commonly defined as the minimum income level necessary to meet the basic needs such as food, clothing, and shelter.

How the Poverty Line is Determined

The poverty line can vary from country to country and even within the regions of a country, depending on the cost of living, economic conditions, and other factors. In some countries, the poverty line is determined by calculating the cost of a basket of basic goods and services that is necessary for maintaining a minimum standard of living. This can include the cost of essential items such as food, housing, and utilities. In many countries, the World Bank's international poverty line is used, which is currently set at $1.90 per day (using 2011 Purchasing Power Parity exchange rates). This line is used to measure the number of people living in extreme poverty around the world.

Importance of the Poverty Line

Understanding the poverty line and its implications is important for several reasons: 1. Measuring poverty: The poverty line allows governments, international organizations, and researchers to measure the extent of poverty in a society and monitor changes over time. 2. Identifying the vulnerable population: The poverty line can help in identifying the most vulnerable people in a community, who require social protection, assistance, or targeted interventions to improve their living conditions. 3. Policy-making and resource allocation: By understanding the poverty line, governments and other organizations can better design and target social policies and programs aimed at reducing poverty and improving the standard of living for their populations. 4. Raising awareness: The poverty line serves as a benchmark for raising awareness about the challenges faced by millions of people worldwide who are struggling to meet their basic needs and fosters a global conversation on poverty eradication and sustainable development.