Friday, October 14, 2011

Setting Poverty Lines

India recently moved its poverty line. The new poverty line said that anyone in a rural area who spent more than 50 cents (US) a day on food or 66 cents a day in urban areas was not poor. There was an immediate outcry of people worried they would no longer receive government support if they were no longer classified as poor. The government quickly went to reassure people that moving the poverty line would not impact their federal welfare help. Pictured is the distribution of poverty in India as of 2001. Some of have also admitted that the new line is not totally reflective of poverty:
Planning Commission Deputy Chairman Montek Singh Ahluwalia agreed that the norms were set at a low level. “It is clearly a rock bottom level of existence and we know very well that everybody at that level of existence is under significant stress. In fact, we know that even above that level, households are vulnerable,” said Ahluwalia.
Ahluwalia clarified that the norms had been based on the assumption that health and education would be provided free of cost to the poor. He said that has not happened in many states across the country.
The poverty of "high-fashion" models in developed countries:
She found that 20 percent of the models on the agency's books were in debt to the agency. Foreign models, in particular, seem to exist in a kind of indentured servitude, she writes, often owing as much as $10,000 to their agencies for visas, flights, and test shoots, all before they even go on their first casting call.
The amazing thing is that this poverty is one they choose. It is possible to have a lucrative career doing commercial modeling, but the social norms look down on this modeling. Many models prefer to accept poverty now in the hopes of winning of the lottery and becoming famous.

On a homework assignment, a lot of my students argued that poor countries set absolute poverty lines while rich countries set relative poverty lines because the line is a lot higher in the US than it is in Nigeria. While I'm going to try to convince them that the level of the line is not what makes it absolute or relative, I think I should also point out this thought from Matt at Aid Thoughts, who argues that all poverty lines are relative:
... the international measure of absolute poverty, i.e living on less than $1.25 (PPP) dollars a day, is not really an absolute measure. Consider this thought experiment: if we had first developed the international policy line 100 years ago or 100 years in the future, would it be the same as it was today? I doubt so – our perceptions of what poverty is change over time, and these perceptions are inherently relative to our own position. This means that even `absolute’ measures are, in some way, a measurement of inequality, just ones we’ve committed to for some unspecified period of time.


  1. I simply not agree with the fact that one can fulfill his/her daily needs with just 50 or 60 cents. Indian govt just made fun of Indian democracy by this rule.
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