Description:
National poverty lines vary greatly
across the world, from under $1 per person per day to over
$40 (at 2005 purchasing power parity). What accounts for
these huge differences, and can they be understood within a
common global definition of poverty? For all except the
poorest countries, the absolute, nutrition-based, poverty
lines found in practice tend to behave more like relative
lines, in that they are higher for richer countries.
Prevailing methods of setting absolute lines allow ample
scope for such relativity, even when nutritional norms are
common across countries. Both macro data on poverty lines
across the world and micro data on subjective perceptions of
poverty are consistent with a weak form of relativity that
combines absolute consumption needs with social-inclusion
needs that are positive for the poorest but rise with a
country s mean consumption. The strong form of relativism
favored by some developed countries -- whereby the line is
set at a fixed proportion of the mean -- emerges as the
limiting case for very rich countries.