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.

INVESTOPEDIA EXPLAINS '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. Federal Poverty Level - FPL

    The set minimum amount of gross income that a family needs for ...
RELATED FAQS
  1. What are the advantages of free trade over mercantilism?

    Free trade provides advantages over mercantilism for individuals, businesses and nations. A key advantage of free trade for ... Read Full Answer >>
  2. Why should sunk costs be ignored in future decision making?

    A sunk cost is a cost that cannot be recovered or changed and is independent of any future costs a business may incur. Since ... Read Full Answer >>
  3. How does money supply affect inflation?

    Definitions matter when describing the relationship between changes in the money stock, or total money supply, and inflation. ... Read Full Answer >>
  4. What are the different ways that utility is measured in economics?

    It's difficult to measure a qualitative concept such as utility, but economists try to quantify it in two different ways: ... Read Full Answer >>
  5. What is the difference between adverse selection and moral hazard?

    In economics, moral hazard and adverse selection are two possible consequences of asymmetric information or ineffective information ... Read Full Answer >>
  6. What caused the American Industrial Revolution?

    The initial vestiges of industrialization appeared in the United States in 1790, when Samuel Slater opened a British-style ... Read Full Answer >>
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. Economics

    What is Adverse Selection?

    Adverse selection occurs when one party in a transaction has more information than the other, especially in insurance and finance-related activities.
  7. Economics

    What is a Capital Account?

    Capital account is an economic term that refers to the net change in investment and asset ownership for a nation.
  8. Economics

    What is a Fiduciary?

    A fiduciary is a person who acts on behalf of another person (or people) to manage assets.
  9. Economics

    Explaining Property, Plant and Equipment

    Property, plant and equipment are company assets that are vital to business operations, but not easily liquidated.
  10. Economics

    Explaining PFIs and PPPs

    Public-private partnerships (PPP) and Private Finance Initiative (PFI) are two business relationships between government agencies and private businesses.

You May Also Like

Hot Definitions
  1. Adverse Selection

    1. The tendency of those in dangerous jobs or high risk lifestyles to get life insurance. 2. A situation where sellers have ...
  2. Wash Trading

    The process of buying shares of a company through one broker while selling shares through a different broker. Wash trading ...
  3. Fixed-Income Arbitrage

    An investment strategy that attempts to profit from arbitrage opportunities in interest rate securities. When using a fixed-income ...
  4. Venture-Capital-Backed IPO

    The selling to the public of shares in a company that has previously been funded primarily by private investors. The alternative ...
  5. Merger Arbitrage

    A hedge fund strategy in which the stocks of two merging companies are simultaneously bought and sold to create a riskless ...
  6. Market Failure

    An economic term that encompasses a situation where, in any given market, the quantity of a product demanded by consumers ...
Trading Center