International Poverty Line

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. Poverty Gap

    The average shortfall of the total population from the poverty ...
  2. Poverty Trap

    A mechanism which makes it very difficult for people to escape ...
  3. Poverty

    A state or condition in which a person or community lacks the ...
  4. Federal Poverty Level - FPL

    The set minimum amount of gross income that a family needs for ...
  5. Jeffrey Sachs

    An American economist who is director of the Earth Institute. ...
  6. The World Bank

    An international organization dedicated to providing financing, ...
Related Articles
  1. Economics

    Understanding Poverty

    Poverty exists when a person’s or community’s basic needs are not being met because financial resources are lacking.
  2. Economics

    America's Poorest States in 2015

    Learn the reasons Mississippi, New Mexico, Louisiana, Georgia and Kentucky are the poorest states in the United States, as of 2015.
  3. Budgeting

    Why Being Poor Is So Expensive

    The less you earn, the more you're likely to spend for the everyday necessities of life.
  4. Economics

    10 Wealthiest States in the United States

    A review of the 10 richest states in America as ranked by median household income.
  5. Investing

    Carlos Slim: Famous or Infamous

    There is an irony to Carlos Slim being the wealthiest man in the world, living, as he has his entire life, in Mexico. His $73 billion net worth, as of 2015, stands out in astounding contrast ...
  6. Fundamental Analysis

    What’s the Difference Between Standard Of Living and Quality Of Life?

    Knowing the difference between standard of living and quality of life can dictate where and how someone invests.
  7. Taxes

    Belgium

    Are there advantages to having the highest taxes in the world? Let's take a look at what the citizens in these countries get for their money.
  8. Investing Basics

    What is a Developed Economy?

    A developed economy is typically one with a high level of growth and security.
  9. 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.
  10. Personal Finance

    How Minimum Wage Impacts Unemployment

    We explain how the minimum wage affects unemployment, public assistance, and the economy overall.
RELATED FAQS
  1. Is China a developed country?

    Understand why China, despite having the world's second-largest economy and third-largest military, is not yet classified ... Read Answer >>
  2. What is the difference between International Monetary Fund and the World Bank?

    Learn about the International Monetary Fund and the World Bank and how they are differentiated by their respective functions ... Read Answer >>
  3. Is Mexico an emerging market economy?

    Learn the difference between a developed economy and an emerging market economy, and understand why Mexico is an emerging ... Read Answer >>
  4. How does gross domestic product (GDP) affect standard of living?

    Find out how gross domestic product is used to measure standard of living. Find out which alternative metrics rely on GDP ... Read Answer >>
  5. What impact does industrialization have on wages?

    Discover the impact that industrialization has on wages, and how the Industrial Revolution changed human standards of living ... Read Answer >>
  6. Where is cost of living lowest in the world?

    Learn how the cost of living is the lowest in India based on numbers derived from the CPI and organizations like Expatistan ... Read Answer >>
Hot Definitions
  1. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  2. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  3. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  4. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  5. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  6. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
Trading Center