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Poverty threshold

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A poverty threshold is a special measurement used by experts. It shows the minimum amount of money a person needs to live. This number helps countries understand how many people are struggling. Economists often calculate this by looking at the cost of necessities. They estimate what one adult needs for a whole year. Housing costs, like apartment rent, are often the biggest part of this math. Because prices change, this threshold might be adjusted every year.

Poverty Thresholds for 2013
Poverty Thresholds for 2013

There are two main ways to think about this topic. The first way is called absolute poverty. This happens when people lack the resources to stay healthy and safe. It focuses on basic needs like food, water, and shelter. The second way is called relative poverty. This looks at how much money a person has compared to others in their community. Even if someone has enough food, they might be in relative poverty if they cannot join in with local life.

Income percentiles, with median and relative poverty levels marked
Income percentiles, with median and relative poverty levels marked

People have studied these lines for a long time. At the turn of the 20th century, Charles Booth studied poverty in London. He helped make the idea of a poverty line popular. Later, a researcher named Seebohm Rowntree studied families in York. He looked at the cost of fuel, light, and clothing. He even calculated the cheapest food needed to keep people from getting ill. His work showed that poverty was a problem across all of Britain, not just in London.

National-poverty-lines-five-countries-2021ppp
National-poverty-lines-five-countries-2021ppp

Many groups use different numbers to measure these needs. The World Bank tracks the International Poverty Line. In June 2025, they updated this line for different types of countries. For low-income countries, the line is $3.00 per person each day. For upper-middle income countries, it is $8.30 per day. These numbers help us see how the world is changing. In 1981, 47.1% of the world lived in poverty. By 2024, that number fell to 10.3%, which is about 839 million people.

Poverty headcount ratio at 1.90 a day
Poverty headcount ratio at 1.90 a day

Measuring poverty is a hard job because prices are different everywhere. A dollar buys different things in different countries. Some experts use a "basic needs" approach to help. This looks at things like sanitation, education, and health care. A UN declaration in 1995 said poverty is a lack of many things. This includes safe drinking water and even having access to information. By studying these needs, leaders can work to make life better for everyone.

Homeless man sleeping under a bench
Homeless man sleeping under a bench
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🖼️ Images & Media (9)
File:Share of the world population living in poverty.png
Share of the world population living in...
File:Poverty Thresholds for 2013.png
Poverty Thresholds for 2013.png
File:Poverty headcount ratio at 1.90 a day.png
Poverty headcount ratio at 1.90 a day.png
File:Homeless man sleeping under a bench.jpg
Homeless man sleeping under a bench.jpg
File:Income_percentiles,_with_median_and_relative_poverty_levels_marked.png
Income_percentiles,_with_median_and_relati...
File:Global-inequality-in-1800-1975-and-2015.png
Global-inequality-in-1800-1975-and-2015.png
File:National-poverty-lines-five-countries-2021ppp.png
National-poverty-lines-five-countries-2021ppp.png
File:Percent Poverty World Map.png
Percent Poverty World Map.png
File:Indian states by poverty in percentage (1999-2000).png
Indian states by poverty in percentage...
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