Discuss the concept of relative poverty.

Relative poverty refers to a measure of poverty that is based on a person or group's income or resources in relation to the average income or resources of the society in which they live. It focuses on the relative deprivation experienced by individuals or households compared to others in their society. In other words, relative poverty is concerned with the extent to which individuals or households fall behind the average living standards of their society.

Unlike absolute poverty, which is based on a fixed threshold below which individuals are considered to be in poverty, relative poverty takes into account the distribution of income and resources within a society. It recognizes that even if individuals have enough to meet their basic needs, they may still be considered poor if they are significantly worse off compared to others in their society.

The concept of relative poverty is important in welfare economics as it helps to understand the level of inequality and social exclusion within a society. It allows policymakers to identify and target those who are falling behind and develop policies to reduce relative poverty and improve overall societal well-being.