International Poverty Line

AAA

DEFINITION of 'International Poverty Line'

An international monetary threshold under which an individual is considered to be living in poverty. It is calculated by taking the poverty threshold from each country - given the value of the goods needed to sustain one adult - and converting it to dollars. The international poverty line was originally set to roughly $1 a day. When purchasing power parity and all goods consumed are considered in the calculation of the line, it allows organizations to determine which populations are considered to be in absolute poverty.

BREAKING DOWN 'International Poverty Line'

Using the international poverty line to determine how well off a population is can be misleading, as the line can be low enough that adding a small amount of additional income will not create an appreciable difference in a person's quality of life. In addition, it can be difficult to quantify other indicators, such as education and health, thus masking the total economic impact on a population.

RELATED TERMS
  1. Ghetto

    A run-down urban area primarily inhabited by a single minority ...
  2. Poverty Gap

    The average shortfall of the total population from the poverty ...
  3. Cost of Living

    The amount of money needed to sustain a certain level of living, ...
  4. Poverty

    A state or condition in which a person or community lacks the ...
  5. The World Bank

    An international organization dedicated to providing financing, ...
  6. Economic Refugee

    A person who leaves their home country for a new country, in ...
Related Articles
  1. Insurance

    An Introduction to Microfinance

    Is microfinance a way to help the poor, or will it just make them poorer?
  2. Fundamental Analysis

    Standard Of Living Vs. Quality Of Life

    What is the difference between a standard of living and quality of life? Find out in this breakdown.
  3. Insurance

    What Is The World Bank?

    You've heard of the World Bank, now find out how it functions and why some groups oppose it.
  4. Personal Finance

    Are We Losing The Middle Class?

    Find out where your income and lifestyle put you compared to the national average.
  5. Fundamental Analysis

    An Introduction To The International Monetary Fund (IMF)

    Chances are you've heard of the IMF. But what does it do, and why is it so controversial?
  6. Markets

    The 5 Biggest Chinese Insurance Companies

    Read about the top Chinese insurance companies by market capitalization, and learn a little about their positions in the marketplace.
  7. Economics

    Is a Recession Coming?

    In the space of a week, the VIX Index, a measure of market volatility, spiked from 13, suggesting extreme complacency, to over 50, evidencing total panic.
  8. Mutual Funds & ETFs

    Top 3 Switzerland ETFs

    Explore detailed analysis and information of the top three Swiss exchange-traded funds that offer exposure to the Swiss equities market.
  9. Investing Basics

    Tuesday Intel: U.S. Stocks Continue Lower

    A summary of news that moved markets yesterday and what to expect today.
  10. Mutual Funds & ETFs

    ETF Analysis: SPDR Dow Jones International RelEst

    Learn how the SPDR Dow Jones International Real Estate exchange-traded fund (ETF) is managed and for whom the ETF is most appropriate.
RELATED FAQS
  1. Is Argentina a developed country?

    Argentina is not a developed country. It has one of the strongest economies in South America or Central America and ranks ... Read Full Answer >>
  2. Is Brazil a developed country?

    Brazil is not a developed country. Though it has the largest economy in South America or Central America, Brazil is still ... Read Full Answer >>
  3. What is the difference between marginal utility and marginal value?

    Depending on the context, marginal utility and marginal value can describe the same thing. The key word for each is "marginal," ... Read Full Answer >>
  4. In economics, what is an index number?

    Economists often make comparisons between sets of data across time. For example, a macroeconomist might want to measure changes ... Read Full Answer >>
  5. What role does the agency problem play in the modern Health Care industry?

    Agency problems vary from health care system to health care system, and not all economists agree on the degree and desirability ... Read Full Answer >>
  6. What is the utility function and how is it calculated?

    In economics, utility function is an important concept that measures preferences over a set of goods and services. Utility ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Bubble Theory

    A school of thought that believes that the prices of assets can temporarily rise far above their true values and that these ...
  2. Stock Market Crash

    A rapid and often unanticipated drop in stock prices. A stock market crash can be the result of major catastrophic events, ...
  3. Financial Crisis

    A situation in which the value of financial institutions or assets drops rapidly. A financial crisis is often associated ...
  4. Election Period

    The period of time during which an investor who owns an extendable or retractable bond must indicate to the issuer whether ...
  5. Shanghai Stock Exchange

    The largest stock exchange in mainland China, the Shanghai Stock Exchange is a nonprofit organization run by the China Securities ...
  6. Dead Cat Bounce

    A temporary recovery from a prolonged decline or bear market, followed by the continuation of the downtrend. A dead cat bounce ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!