Chapter 5 Flashcards
What happened to global poverty since the 1970s?
the share and number of people living in extreme poverty has declined at an increasing rate since the 1970s
Since 1970, the world has seen significant progress in reducing
extreme poverty
Factors that contribute to the decline of extreme poverty
economic growth, international development efforts, technology, health and education improvements
Poverty reduction has not been equal, with some regions still having high poverty rates like
Sub Saharan Africa
absolute poverty
extreme poor living <$1.90/day; unable to afford basic necessities like food, water, shelter
relative poverty
lacking sufficient $ to live at a standard considered comfortable or normal in society (OED); too poor to afford a telephone
Countries typically define poverty lines in terms of
the amount of money required to purchase enough food for one’s family
absolute poverty refers to
basic survival needs
relative poverty refers to
not having enough money to live at a standard considered acceptable by society
absolute poverty is concentrated in the
least developed countries
poverty line
amount of income required to purchase consumption basket (2000 cal of food)
poverty headcount ratio
the proportion of population below the poverty line
poverty gap
measures how deep poverty is, it shows how far people in poverty are from the poverty line and how far they are from escaping it
Let’s imagine a scenario where the poverty line is set at $10 per day.
We have a small group of 5 people with daily incomes of $2, $5, $8,
$12, and $15.
- Who falls below the poverty line, and by how much?
- anyone earning less than $10 per day, so, that would be the individual’s earnings $2, $5, and $8
- next, calculate how much they are falling short of the poverty line
- the person earning $2 is $8 below the poverty line ($10-$2=$8)
- similarly, the persons earning $5 and $8 are $5 and $2 below the poverty line
Let’s imagine a scenario where the poverty line is set at $10 per day.
We have a small group of 5 people with daily incomes of $2, $5, $8,
$12, and $15.
- What is the total poverty gap?
- the total poverty gap is $15 which is the sum of the income shortfalls for all individuals below the poverty line ($8+$5+$2=$15)
- this shows how much money is needed to bring all these individuals up to the poverty line and eliminate poverty for them
Let’s imagine a scenario where the poverty line is set at $10 per day.
We have a small group of 5 people with daily incomes of $2, $5, $8,
$12, and $15.
- What is the poverty headcount ration?
- the formula is (# of people below the poverty line/total population) * 100 = 3/5 * 100 = 60%
- this means that 60% of the population is living below the poverty line of $10 per day
Where are the World’s Poor?
Sub-Saharan Africa, South Asia, East Asia, Latin America, Middle East and North Africa, Central Asia
Sub-Saharan Africa
has the highest percentage of people living in extreme poverty, defined as living on less than $1.90p per day; countries like the Democratic Republic of Congo, Madagascar, and Malawi are notable examples
South Asia
countries such as India, Bangladesh, Nepal, and Pakistan have large numbers of people in poverty, although economic growth in recent decades has reduced poverty rates, many still live below the poverty line
East Asia
particularly China, has seen significant reductions in poverty due to rapid economic growth and development, however, poverty remains a challenge in some areas, especially in rural regions and among marginalized communities
Latin America
extreme poverty rates are lower compared to Sub-Saharan Africa and South Asia, but the region experiences high levels of economic inequality
Middle East and North Africa
conflict and political instability have worsened poverty in countries like Yemen and Syria, economic challenges and lack of job opportunities also contribute to poverty in the region
Central Asia
countries like Afghanistan face high poverty rates due to conflict and limited economic opportunities
Who are the vulnerable groups?
- women ad children are hit hard by poverty, they face challenges like limited access to education, healthcare, and job opportunities
- indigenous people and minorities group often face higher poverty rates due to marginalization, discrimination and lack of support
- refugees and internally displaced persons are particularly vulnerable to poverty, they lack access to basic needs and economic opportunities
