Economics Welfare Economics Questions
There are several methods of measuring poverty, including:
1. Absolute Poverty Line: This method sets a fixed income threshold below which individuals or households are considered to be in poverty. The poverty line is typically determined based on the cost of a basic basket of goods and services necessary for survival.
2. Relative Poverty: This approach measures poverty in relation to the average income or living standards of the society. Individuals or households falling below a certain percentage of the median income are considered to be in poverty.
3. Human Development Index (HDI): The HDI is a composite measure that takes into account not only income but also other indicators of well-being, such as education and life expectancy. It provides a broader understanding of poverty by considering multiple dimensions of human development.
4. Multidimensional Poverty Index (MPI): The MPI measures poverty by considering various indicators across different dimensions, such as health, education, and living standards. It provides a more comprehensive view of poverty by capturing the multiple deprivations faced by individuals or households.
5. Subjective Measures: These measures rely on individuals' self-assessment of their own well-being or satisfaction with life. Surveys or questionnaires are used to gather subjective data on poverty, allowing individuals to express their own perceptions and experiences of poverty.
It is important to note that each method has its own strengths and limitations, and the choice of measurement method depends on the specific context and objectives of the analysis.