Absolute & Relative Poverty

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Poverty is categorized in many different ways. The first is absolute versus relative poverty. Absolute poverty refers to inability to meet the basics needs for human survival. The World Bank defines extreme absolute poverty  as $1.25 per day at purchasing power parity; one of the major Millennium Development Goals was a 50 percent reduction in global rates of extreme poverty.

Relative poverty, on the other hand, is not a single global number but takes into account regional variations and income inequality; a "poor" person in the United States or Europe may be living in extreme relative poverty with an income of more that $1.25 per day. Relative poverty reflects how people live in relation to their compatriots. For example, in the developed world, lack of internet access, which limits children's ability to do well in school and adults' ability to hunt for jobs, would be an indicator of relative poverty, even though a family who cannot afford internet access may still have adequate food and shelter.

Situational poverty is temporary and the easiest form of poverty to solve. This includes poverty caused by temporary or unusual circumstances such as natural disasters, wars, or family illness.

Chronic or generational poverty is the most intractable form of poverty, because it describes families trapped in cycles of poverty with no path out, in which poverty may lead to child malnutrition, illness, and lack of education, meaning that children are raised in circumstances in which they do not end up with the tools necessary to help lift themselves out of poverty.

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