An analysis of the main criticisms of the dollar a day method of calculating poverty

Scavenger children, who collect recyclable items from garbage to earn their living, wait for a garbage truck in this file photo. The PML-N government on Thursday announced that 60 million Pakistanis are living below the poverty line, posing a challenge for the ruling party. The number of poor increased owing to the adoption of a new methodology for measuring poverty which uses the survey data, said Minister for Planning, Development and Reforms Ahsan Iqbal.

An analysis of the main criticisms of the dollar a day method of calculating poverty

Absolute poverty refers to a set standard which is consistent over time and between countries. An example of an absolute measurement would be the percentage of the population eating less food than is required to sustain the human body approximately — calories per day.

Relative poverty, in contrast, views poverty as socially defined and dependent on social context. In this case, the number of people counted as poor could increase while their income rises. There are several different income inequality metrics ; one example is the Gini coefficient.

Although absolute poverty is more common in developing countries, poverty and inequality exist across the world. The US poverty line was created in —64 and was based on the dollar costs of the U.

Department of Agriculture's "economy food plan" multiplied by a factor of three. The multiplier was based on research showing that food costs then accounted for about one-third of money income.

This one-time calculation has since been annually updated for inflation. For example, the Heritage Foundationa conservative U. Further, federal poverty statistics do not account for the widely varying regional differences in non-food costs such as housing, transport, and utilities. Some people argue that this ignores a key component of economic well-being.

Major developments and research in this area suggest that standard one dimensional measures of poverty, based mainly on wealth or calorie consumption, are seriously deficient.

This is because poverty often involves being deprived on several fronts, which do not necessarily correlate well with wealth. Access to basic needs is an example of a measurement that does not include wealth. Access to basic needs that may be used in the measurement of poverty are clean water, food, shelter and clothing.

Similarly, extremely poor people may not be deprived if sufficiently strong social networks, or social service systems exist. For deeper discussion see. Definitions[ edit ] The World Bank defines poverty in absolute terms.

It has been estimated that in1. The proportion of the developing world 's population living in extreme economic poverty has fallen from 28 percent in to 21 percent in Much of the improvement has occurred in East and South Asia.

Other regions have seen little or no change. In the early s the transition economies of Europe and Central Asia experienced a sharp drop in income.

Poverty rates rose to 6 percent at the end of the decade before beginning to recede. Life expectancy has greatly increased in the developing world since World War II and is starting to close the gap to the developed world where the improvement has been smaller.

Even in Sub-Saharan Africa, the least developed region, life expectancy increased from 30 years before World War II to a peak of about 50 years — before the HIV pandemic and other diseases started to force it down to the current level of 47 years.

An analysis of the main criticisms of the dollar a day method of calculating poverty

Child mortality has decreased in every developing region of the world. Women made up much of the gap: There are similar trends for electric power, cars, radios, and telephones per capita, as well as the proportion of the population with access to clean water. Stats[ edit ] Even if poverty may be lessening for the world as a whole, it continues to be an enormous problem: One third of deaths — some 18 million people a year or 50, per day — are due to poverty-related causes.

That's million people sincethe majority women and children, roughly equal to the population of the US.poverty formula developed in , 3x cost of nutritionally adequate diet $23, a year for family of four, 49% are children under ages of Criticism of official poverty measurement overestimates and underestimates poverty.

It provided a new method of calculating the poverty line based on per capita consumption expenditure per month or day.


For rural areas, it was Rs per month or Rs 27 per day. For urban areas, it was Rs per month or Rs 33 per day. The government's method of calculating the official poverty rate a. Does not take into account differences in the cost of living in different parts of the country b.

Does not account for the value of in-kind benefits received by poor families c%(15). Further analysis of the past data under the new poverty line estimates the poverty headcount ratio at pc in , which has now fallen to pc.

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World bank poverty line is $2 a day. 17 In principle, the INE poverty rate should incorporate the impact of subsidized food on the poor, simply by taking into account the prices that poor people pay for food, in calculating the food basket on which the poverty line is based.

What are the main criticisms of the 'Dollar a day' method of calculating poverty? Poverty exists throughout the whole world. In all its forms, be it relative or absolute, poverty is a mass epidemic in third-world countries especially.5/5(1).

New poverty line makes a third of Pakistanis poor - Pakistan -