Einar H. Dyvik
Research expert covering Nordics and global data for society, economy, and politics
Get in touch with us nowDefining Poverty
Poverty can be defined as the state of a person or a group of people that lacks a specified amount of money or material possessions to meet basic needs and/or an adequate living standard. The definition of poverty varies over time; whereas up until recently, the global poverty line was set at 1.90 U.S. dollars a day in terms of Purchasing Power Parities, it was set to 2.15 U.S. dollars in September 2022 due to the rising inflation. Moreover, the national poverty levels vary greatly. For instance, a person residing in the United States needs a far higher level of income to afford a certain standard of living than a person in Nigeria. In middle-income countries, the poverty line is set at 3.65 U.S. dollars a day as of 2022 to reflect the higher amount of income required there, and at 6.85 U.S. dollars in high-income countries.Furthermore, measuring the share of people living below the poverty line has some limitations as it does not take the sheer depth of the poverty into account. Hence, if the 71 percent of the population in Somalia currently living on less than 2.15 U.S. dollars a day become even poorer, the share will remain the same. Here, the poverty gap comes into account. The poverty gap measures how far below the poverty line the average poor person in a country is, thus taking the depth of poverty into account.
Dimensions of poverty
Poverty is usually divided into absolute and relative poverty. The first concerns basic human needs such as food, water, sanitation, and shelter, and can be measured equally between different countries and regions. Relative poverty, on the other hand, relates to whether a person can afford a certain standard of living and participate in social life, and this level varies from country to country.The many different dimensions of poverty are interrelated. For instance, poor sanitary conditions, no access to clean drinking water, and a lack of access to clean cooking fuels can all have an impact on the nutrition of a person and, in the worst cases, even result in mortality. Moreover, a lack of access to electricity, lack of access to education, and a lack of access to certain assets and to a social life are all different dimensions of poverty. Researchers have found that in order to fight global poverty effectively, the many dimensions of the phenomenon must be addressed simultaneously. Despite recent setbacks caused by COVID-19 and rising inflation, the share of the population living in extreme poverty in Africa is forecast to fall below 20 percent within 2045, and even below two percent by 2065. Although there is no guarantee that this scenario will come true, it offers cause for optimism about the future.
