Glossary of Concepts of Poverty

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Absolute poverty:  refers to a fixed standard (often represented by currency) of deprivation across nations (e.g., $1.25/day).


Advanced economy:  nation that has a high GDP per capita, a diverse array of exports, and high levels of integration into global financial industries.


Basic needs approach:  defines poverty as access to a set of minimal conditions for sustaining physical well being, usually through consumer expenditure.


Capabilities approach:  developed by Amartya Sen and Martha Nussbaum.  Defines poverty as ability to achieve life of value within a given society.  Specific values are defined by the people concerned in a process of social choice-making but might include factors such as literacy, adequate shelter, desirable cuisine, entering public life without shame, etc.


Chronic poverty:  living in poverty for an extended period of time; the US Census Bureau defines this period of time as 3-4 years.


Culture of poverty:  a controversial social theory advanced by Oscar Lewis in The Children of Sanchez (1961) and incorporated in the U.S. policy debates in the infamous Moynihan Report.  Asserts that poor people share a distinctive value system that perpetuates poverty.


Episodic poverty:  living in poverty for two or more consecutive months in a given time period with spells of at least two months out of poverty.


Extreme poverty:  a condition of absolute deprivation; defined by the World Bank as living on less than $1.25/day or the Asian Development Bank as living on less than $1.50/day and being susceptible to natural disasters.


GINI coefficient:  a measure of income inequality, ranging from 0 to 1 where 0 = perfect inequality and 1 = perfect equality.


Human development index:  a multivalent standard used by the United Nation’s Development Program; going beyond economic indicators alone, this measure combines per capita income, life expectancy and educational levels.


Multidimensional Poverty Index:  measures deprivation in health, education, and standard of living at the household level.  This measure replaces the Human Poverty Index used in UN reports prior to 2009.   It complements purely economic measures, such as the World Bank’s $1.25/day.


Poverty threshold:  as used by the US census, this refers to basic income per person multiplied by number of members of the household.


Relative poverty:  refers to low levels of income or wealth within a particular context, usually national.  For example, those in the lowest quintile of incomes in a particular nation might be understood as experiencing relative poverty.


Standard of living:  as used by the Human Development Index, this measure mainly refers to the gross national income per capita.


Supplemental Poverty Measure:  a measure developed in the US to supplement the Census Bureau’s poverty threshold.  Includes several consumer expenditures (e.g., health care, clothing, housing, utilities) and calculates varying cost of living by area.  Considers public relief as part of income.


Working poor:  one or more persons in a household who hold employment while the household falls below the poverty threshold.

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