Poverty is separated into two different terms - Relative poverty and Absolute Poverty. A relative poverty line is different in all countries . It is a constant proportion of the mean and median income in the country. Relative poverty changes as income changes. The absolute poverty line is set in terms of a particular living standard, defined in a common currency and held constant for all countries and regions. If the basic needs are not a available - housing, food, clothing and water, one is said to be ' absolutely poor' Methods of measuring poverty that are commonly used are - the poverty gap index (PGI) which measures the aggregate amount of poverty relative to the poverty line ie. the average poverty gap across the entire population. -the headcount index (HCI) The proportion of the total population considered to be poor is the fraction of the population whose standard of living is below the poverty line. - The Foster- Green- Thorbecke (FGT) This is the square of the poverty gap, divided by the population.
