What is a poverty line, and how are poverty lines calculated?

Relative poverty is a household income below a certain percentage, typically 50% or 60%, of that country’s median income. This measurement takes into consideration the subjective cost of participating in everyday life. For example, plumbing is a necessity in some places; without plumbing, a person could be considered impoverished. But, in other regions, plumbing is a luxury. Relative poverty is helpful for considering income inequality within a country.

What is multidimensional poverty?

Multidimensional poverty acknowledges that poverty isn’t solely about income. Even if a person’s income is above the poverty line, their family may still not have basic services such as electricity, access to clean water, sanitation, and education.

The Global Multidimensional Poverty Index, developed in 2010 by the U.N. Development Programme and the Oxford Poverty and Human Development Initiative, takes into account a person’s healthcare, education, and living standards when measuring poverty levels.

The index considers 10 key indicators: nutrition, child mortality, years of schooling, school attendance, cooking fuel, sanitation, drinking water, electricity, housing, and assets. If a person is experiencing deprivation in three or more of these standards, they’re considered multidimensionally poor. This approach to measuring poverty offers insights into specific interventions needed in each country to eliminate it.

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