The poverty line is a level of Revenu S below which a household is regarded as poor. The poverty line takes radically different values according to the studied countries: developed countries or developing country.
One can define the poverty line in an absolute way (according to a basket of minimal consumption) or relative (expressed as a percentage of the median or average income).
One often adds individual factors to adapt the notion to diversity of the circumstances, for example the family loads, the age, the number of people living in the Ménage.
Various measurements of the poverty line
The concept of poverty monetary being difficult to encircle with precision, several conventions are used to determine the poverty line. One in general distinguishes a poverty line absolute , used for the Developing country and several developed Pays, and a relative poverty line , used in some developed Pays.The poverty line is useful as an economic tool with which to calculate how much people are concerned and who they are, in order to decide with full knowledge of the facts the socio-economic reforms of fight against poverty ( Social minimums, universal Allocation,…).
Absolute poverty line
To determine the poverty line one generally seeks to establish how much all the essential resources cost on the whole that on average an adult consumes in one year. This approach is based on the evaluation which is made minimal expenditure to ensure a tolerable Standard of living. This method is at the origin of the calculation of the poverty line in the United States, where the poverty line was since statement because of the Inflation. In some Developing country, the most important part of the resources is assigned to the rent necessary to live in an apartment . The economists thus draw the attention to the Real estate market and the prices of housing because of their strong influence on the poverty line.There exist several methods evaluation absolute of poverty. All these methods are based on allowed normative conventions at one time given in the country or a given community. One of these methods is provided by the the World Bank with like criterion a normative threshold of a dollar (of 1990) per anybody and day; a threshold of two dollars is also usually employed. The number of people under this threshold in a country is delicate to estimate: on the one hand, the countries concerned do not have the means of holding of the detailed national statistics, on the other hand for this level of income it is necessary to take account of noncommercial activities, like the Autoconsommation or the possible access to Public services. This method applies primarily within the framework of the international comparisons between country.
In order to be able to make international comparisons, the thresholds must be expressed in Purchasing power parity, which makes it possible to be freed from the differences of purchasing power of different the currencies. However, this method is prone to guarantee, since the poor household consumption can be different from that of the representative household, being used with the establishment of the rates as purchasing power parity.
Another approach of absolute poverty is founded on the method of the cost of the essential needs. This method consists in estimating the level of income necessary to an individual to satisfy a given normative heating need (: 2450: 2400: 2200: 2100 Kcal or any other level). This approach supposes the determination of two components of the poverty line: a monetary component and a nonmonetary component. The poverty line is the sum of the two thresholds previously estimated.
In certain industrialized countries like the the United States or the Canada, it is also an absolute threshold which is used. This measurement can bring a lighting on the poverty felt by part of the population, in comparison with the other individuals.
The poverty line throughout the world
The the World Bank, which studies especially the Developing country, retains identical absolute poverty lines (1 dollar/day, 2 dollars/day, etc), and holds account in its measurements of the purchasing power parities.For the European Union, Eurostat uses a relative threshold of 60% of the median income.
Poverty line in France
See also: Poverty in France
In France, INSEE also calculates, in addition to the threshold with 60%, a relative threshold corresponding to half of the median income .
In France, in 2005, for a person alone, the relative poverty line is of 681 euros (threshold to 50%) or of 817 euros (threshold with 60%). For a couple with two children of more than 14 years, the threshold is of 1703 euros (threshold 50%) or of 2043 euros (threshold 60%).
In France, 3,73 million people (6.4% of the population) lived in lower part of the relative poverty line of 50% in 2005, and 7,13 million people (12.3% of the population) lived under the poverty line of 60%.
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