Topic 2 Poverty

Question 1

Poverty definition

Answer 1

Whether households or individuals have enough resources to meet their needs

Question 2

Monetary poverty dimensions (2)

Answer 2

Income
Consumption

Question 3

Non-monetary dimensions (3)

Answer 3

Health and nutrition
Education
Subjective perceptions

Question 4

Absolute poverty

Answer 4

Lacking in resources necessary for survival

Question 5

Relative poverty

Answer 5

Lacking in resources in relation to society. (Inequality view)

Question 6

What poverty effects (5)

Answer 6

Serious constraints or higher costs to…

Health
Productivity, innovation and investment
Strain on public services
Crime
Civil unrests, risk of war and migration

Question 7

Link between income and nutrition

Answer 7

As income increases, life expectancy increases.

However there are diminishing returns to income e.g through obesity and other “rich world” diseases

(KNOWN AS PRESTON CURVE)- curve is upward sloping then flattens

Question 8

Measures of poverty and tool

Answer 8

Tool: poverty line

Measures:
Incidence of poverty: Headcount index
Depth of poverty: Poverty gap

Question 9

Poverty line

Answer 9

Cut off point separating poor from non-poor.

Question 10

Absolute poverty line vs relative poverty line

Answer 10

Absolute is earning less than $1.25/2 a day.

Relative is based on average income level e.g in UK it is earning less than 60% of median household income

Question 11

Choice of poverty line is arbitrary: cost of livings vary as well as different types of deprivation so a number of poverty lines must be estimated.

A good example is Bangladesh having 43.3% below $.125, but 76.5% below $2, so can be misleading.

Poverty lines are static while poverty is dynamic.

Question 12

Poverty headcount (PH)

Answer 12

Proportion of people below poverty line out of population.

Question 13

What has been happening with poverty rate trends

Answer 13

Has been falling

Question 14

Poverty gap

Answer 14

Average gap between the income of the poor and the poverty line, in terms of the poverty line.

Between 0-1

Question 15

Poverty gap formula

Answer 15

PG= 1/n x (sum of poverty gaps/poverty line)

Z=poverty line
Yi=household income
N=population

Note: if z-yi is a negative number, it means no poverty as household income (Yi) > poverty line

Question 16

Poverty in the UK stats

Answer 16

poverty line is £251 before housing costs, £215 after housing costs

Question 17

Type of family in poverty

Answer 17

Lone parents and single pensioners most likely to be in poverty

Question 18

Economic status in poverty

Answer 18

Non-working households have higher rates of povety

Question 19

Ethnicity on poverty

Answer 19

Ethnic minority have higher rates of poverty

Question 20

Other characteristics with poverty

Answer 20

Poor people likely to have long standing illness or disability

Larger families more likely

West Midlands