Pearson Edexcel · A-Level · Economics B

    Course version: 9EB0 · Version from Sept 2015

    B) Measures of poverty: o national measures o international measures

    Full specification wording

    Poverty and inequality: b) Measures of poverty: o national measures o international measures

    Poverty can be measured at both national and international levels.

    Checked against the Pearson Edexcel 9EB0 specification (opens in a new tab) on .

    • Point 2 of 3
    • 3 key terms

    Study notes

    From the checked teaching notes for this specification point.

    The idea

    Poverty can be measured at both national and international levels. National measures often focus on relative poverty, defining it as a percentage of the median household income (e.g., in the UK, households earning below 60% of the median income are considered to be in relative poverty). This reflects the ability to participate in a specific society's standard of living. International measures typically focus on absolute poverty, using a standardised threshold such as the World Bank's poverty line (e.g., living on less than $2.15 per day at purchasing power parity). This allows for cross-country comparisons of severe deprivation, regardless of the specific nation's overall wealth.

    What earns the marks

    • Define national measures of poverty, typically using a relative poverty line based on a percentage of median income.
    • Define international measures of poverty, typically using an absolute poverty line such as the World Bank's daily income threshold.
    • Explain how national measures account for the specific cost of living and societal norms within a single country.
    • Explain how international measures use purchasing power parity (PPP) to enable valid comparisons of absolute deprivation across different countries.

    Common mistakes and how to put them right

    • Confusing absolute and relative poverty measures.

      Put it right: Absolute poverty is a fixed international threshold (e.g. $2.15 a day), whereas relative poverty is a national measure based on median income.

    • Assuming national poverty lines are the same globally.

      Put it right: National measures vary significantly because they are based on the specific median income of each individual country.

    • Forgetting that international poverty lines are adjusted for purchasing power.

      Put it right: International measures like the World Bank poverty line use purchasing power parity (PPP) exchange rates, not market exchange rates.

    Exam tips

    • When evaluating poverty measures, consider the limitations of using a single international monetary threshold that may ignore access to public services.
    • Be prepared to calculate or interpret relative poverty if given data on a country's median income and the percentage threshold used.
    • Use the concept of purchasing power parity (PPP) when explaining how international poverty lines are standardised across different currencies.

    Try the lesson

    The start of the Poverty and inequality: b) Measures of poverty: o national measures o international measures lesson, made from checked teaching notes for this specification point.

    Have a go first

    Which of the following is the most commonly used international measure of absolute poverty?

    Listen

    Poverty can be measured at both national and international levels. National measures often focus on relative poverty, defining it as a percentage of the median household income (e.g., in the UK, households earning below 60% of the median income are considered to be in relative poverty). This reflects the ability to participate in a specific society's standard of living. International measures typically focus on absolute poverty, using a standardised threshold such as the World Bank's poverty line (e.g., living on less than $2.15 per day at purchasing power parity). This allows for cross-country comparisons of severe deprivation, regardless of the specific nation's overall wealth. A strong answer earns marks for these points. Define national measures of poverty, typically using a relative poverty line based on a percentage of median income. Define international measures of poverty, typically using an absolute poverty line such as the World Bank's daily income threshold. Explain how national measures account for the specific cost of living and societal norms within a single country. Explain how international measures use purchasing power parity (PPP) to enable valid comparisons of absolute deprivation across different countries. A common slip: Confusing absolute and relative poverty measures. Instead, absolute poverty is a fixed international threshold (e.g. $2.15 a day), whereas relative poverty is a national measure based on median income. Exam tip: When evaluating poverty measures, consider the limitations of using a single international monetary threshold that may ignore access to public services.

    See it

    A top-down flowchart. The top node 'Measures of poverty' branches into two nodes: 'National measures' and 'International measures'. From 'National measures' a branch leads to 'Relative poverty', which leads to 'Percentage of median household income', which leads to 'UK example: below 60% of median income'. A second branch from 'National measures' leads to 'Reflects ability to participate in that society's standard of living'. From 'International measures' a branch leads to 'Absolute poverty', which leads to 'World Bank poverty line: less than $2.15 per day at PPP'. A second branch from 'International measures' leads to 'Allows cross-country comparison of severe deprivation'.
    It shows how measures of poverty split into national relative measures based on median income and international absolute measures based on the World Bank poverty line at PPP.

    Key words

    Say what each word means before you turn the card.

    Relative poverty

    Try answering aloud or in your head before turning the card.

    Absolute poverty

    Try answering aloud or in your head before turning the card.

    Purchasing power parity

    Try answering aloud or in your head before turning the card.

    See every definition
    Relative poverty
    A national measure defining poverty as a percentage of the median household income, reflecting the ability to participate in a specific society's standard of living.
    Absolute poverty
    An international measure using a standardised threshold such as the World Bank's poverty line, allowing cross-country comparisons of severe deprivation regardless of a nation's overall wealth.
    Purchasing power parity
    An adjustment used by international measures so that a standardised threshold enables valid comparisons of absolute deprivation across different countries.

    Label the diagram

    Some boxes have lost their names. Pick the right name for each number.

    The diagram again, with 3 boxes numbered instead of named. A top-down flowchart. The top node 'Measures of poverty' branches into two nodes: 'National measures' and 'International measures'. From 'National measures' a branch leads to 'Relative poverty', which leads to 'Percentage of median household income', which leads to 'UK example: below 60% of median income'. A second branch from 'National measures' leads to 'Reflects ability to participate in that society's standard of living'. From 'International measures' a branch leads to 'Absolute poverty', which leads to 'World Bank poverty line: less than $2.15 per day at PPP'. A second branch from 'International measures' leads to 'Allows cross-country comparison of severe deprivation'.
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    • 2Box 2

    • 3Box 3

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