Question

What is the most widely used measure for assessing poverty?

• A. Poverty Line
• B. Calorie Intake
• C. Standard of Living
• D. Consumption Expenditure

Answer 1

Answer:

A. Poverty Line

Poverty Line: A Key Indicator in Economics

• The Poverty Line is the most widely used measure for assessing poverty. It represents the minimum income level required to meet basic needs.
• It is often defined as the amount of money a person needs to afford a diet that meets minimum nutritional standards.
• Absolute Poverty Line: This is a fixed standard based on the cost of essential goods and services. It is used to measure poverty in developing countries.
• Relative Poverty Line: This is defined in relation to the median income in a particular country. It reflects the societal standard of living and is commonly used in developed countries.
• World Bank's International Poverty Line: Currently set at $2.15 per day (in 2017 PPP dollars), it is used to measure extreme poverty globally.
• National Poverty Lines: Most countries set their own poverty lines based on their specific economic conditions and cost of living.
• Significance in Competitive Exams: Understanding the poverty line is crucial for exams focusing on economics, social justice, and development studies, particularly in the context of India and Kerala.
• Kerala Model Development: Kerala is often cited for its high human development indicators despite its per capita income. This model emphasizes public spending on education, health, and social welfare, which impacts poverty reduction and the effectiveness of poverty line measures.
• Criticisms: While widely used, the poverty line measure has faced criticism for potentially underestimating the extent of poverty, especially concerning non-monetary deprivations and inequality.