How Can we Estimate Poverty

There are various ways of estimating poverty: monetary poverty is expressed in (absolute or relative) economic terms; human poverty relies on social indicators; social exclusion broadly implies marginalization (involving political considerations).

There are six billion people in the world: 2.9 billion of them live on less that two dollars a day and 1.2 billion live on less than one dollar a day. In Egypt, 3.1 percent of the population survive on less than a dollar a day, and 52.7 percent live on less than two dollars (1). How can you compare a dollar’s worth of goods worldwide? And how can you estimate poverty, with its broad economic, social and political dimensions?

Absolute monetary poverty indicators: Estimating poverty in terms of purchasing power is one of the most common measures of poverty. Thresholds, called poverty lines, are built on the pricing of a basket of goods that would satisfy a person’s basic nutrition needs .

Relative monetary poverty indicators: Absolute poverty measurements give no indication as to the relative position of the poor.
Social indicators and human poverty: Monetary poverty indicators, represented by income or consumption, do not express the true dimensions of destitution.

Poverty as a denial of human rights: Human poverty means that people cannot lead a secure existence, make use of opportunities, have choices, freedom, dignity and self-respect, or have access to resources needed for a decent standard of living.

Source: http:// grida.no/publications/et/ep1/page/2507.aspx