Theme 4:2:Poverty and Inequality Flashcards
what is absolute poverty?
being unable to afford the goods and services necessary to maintain life. The world bank defines anyone living on less than $1.90 per day as living in absolute poverty.
what is relative poverty?
when household income falls below 60% of the median household disposable income.
define poverty.
the state of having little material possesions over time.
how to measure poverty rate.
estimate percentage of population living below the poverty line
what are the 6 main causes of poverty?
-high levels of unemployment
-lack of human capital(education, training)
-health problems
-high dependency ratio
-discrimination
what are the causes of poverty in developing countries?
-high population growth
-slow capital accumulation
-war, corruption, famine
what are the causes of poverty in the UK?
-changing demographics e.g. ageing pop
-widening income inequality
-benefits damage incentive to work
-pressure on welfare system
-negative externalities e.g. crime
what is GNI per capita?
a measure of development and its the average income per person in the population.
wealth vs income.
wealth -value of assets e.g. stocks and shares
income-the flow of money e.g. wages
what are the 2 measures of income inequality?
-The lorenz curve
-Gini coefficient
what does the Lorenz curveshow?
what percentage of the population acquire a certain percentage of income.
what is the line of perfect equality and what numbers show perfect/imperfect equality?
a 45 degree line
0= perfect equality
1=perfect inequality
calculate the gini co-effient.
area A/area A+ area B
causes of inequality within a country.
regressive tax
no welfare benefits
no minimum wage
no strong trade unions
causes of inequality between countries.
colononisation-exploitation
capitalist economies
