Definition
- Relative poverty
- Relative poverty is having an income below a set percentage of the median income in one's own country, so the line moves as incomes move.
- Not to be confused with: Absolute poverty
- Absolute poverty is having an income below the level a person needs for a basic standard of living, such as food, clothing and shelter.
Test yourself
What is the difference between relative poverty and absolute poverty?
An absolute line is fixed in real terms; a relative line moves with the median income.