A definition of poverty

Poverty can be found everywhere in the world. Whether in industrialized countries, in emerging markets or in developing countries. But poverty is defined differently in every country. In addition, each person has their own idea of what it means to be poor.

In the 2030 Agenda's list of goals, ending poverty in all its dimensions is described as the first goal. The eradication of poverty is one of the most important development policy goals and a basic prerequisite for the achievement of all other sustainable development goals. For example, world hunger can only be ended and access to education ensured for all if people have a sufficient income.

You could say that someone is poor if he or she has too little income.

But what is too little? You could also say that a person is poor if he or she cannot meet his or her basic needs. But, what are the basic needs and who decides when they are satisfied??

Despite the difficulty of defining poverty in a binding and uniform way, there are attempts to describe the concepts of poverty and basic needs. To describe and define poverty and its different forms, the following three concepts are often used: Extreme Poverty, Relative Poverty and Perceived Poverty

Extreme poverty

Extreme poverty, or absolute poverty, applies to people who have less than $1.25 per day in income. 1.25 dollars is 1.13 euros, i.e. approximately 33 euros per month. This definition sets an absolute threshold for all nations in the world. If the income falls below this threshold, a person is considered to be extremely poor.

Attempting to define poverty in terms of monetary value in order to collect internationally comparable statistical data creates several problems. On the one hand, the threshold is not or only insufficiently adjusted to the price development of the last years. For example, the World Bank raised its threshold for measuring extreme poverty to $1.90 just one week after the 2030 Agenda was adopted. On the other hand, although the threshold value of 1.25 dollars is shown as so-called purchasing power parity, which means that the monetary amount of 1.25 dollars in different countries is made comparable by the exchange rates. However, attention to exchange rates does not, for example, capture local barter or address various forms of discrimination against individuals or groups in the acquisition of goods.

Relative poverty

Relatively poor is defined as people whose income is less than 50 or 60 percent of the median income of the inhabitants of a country. In the European Union, 60 percent of median income is used to measure relative poverty. In other countries, it is often 50 percent, which is why there is a certain arbitrariness here as well. Relative poverty thus already varies with the type of statistical survey.& nbsp ; But also with the level of welfare of a society and changes with its development.

In Germany, the value of the median income in 2014 was 19.733 euros per year. This results in a threshold of 987 euros as monthly income. Relative poverty is also defined as a threshold below which a person in Germany is considered poor.

Would you feel poor with 987 euros a month? How well could you meet your needs?

Perceived poverty

In contrast to extreme and relative poverty, perceived poverty is not based on a calculable monetary value. People feel poor because they are discriminated against or feel disadvantaged. The definition of poverty is not limited to income and material goods, but is a question of social or cultural perception.

The aspiration of SDG 1 is to end poverty in all its forms. This requires a multidimensional approach that takes into account absolute poverty, relative poverty and perceived poverty. Instead of focusing on income alone, multidimensional definitions of poverty also address basic needs such as education, health, nutrition, water and sanitation.

The other Sustainable Development Goals address these issues in detail. So ending poverty is an overarching goal of the 2030 Agenda.

Multidimensional definitions

A more recent approach to poverty measurement was developed in 2010 with the Multidimensional Poverty Index (MPI). The MPI measures poverty in three dimensions: education, health and standard of living, and captures different indicators for each dimension. The MPI was revised in the winter of 2015/16. MPI is now available for over 100 developing and emerging countries.

So in summary, it's hard to describe poverty with a single indicator. With each definition, other aspects of poverty can be addressed. So if poverty is the topic, ask what poverty is being talked about.

How would you define poverty?

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