Poverty Gap


DEFINITION of 'Poverty Gap '

The average shortfall of the total population from the poverty line. This measurement is used to reflect the intensity of poverty. The poverty line that is used for measuring this gap is the amount typical to the poorest countries in the world combined with the latest information on the cost of living in developing countries. The poverty line is indicated by the widely accepted international standard for extreme poverty. This standard is $1.25 daily. However, it's been difficult to set a common international poverty threshold since different countries have different thresholds for poverty.

BREAKING DOWN 'Poverty Gap '

The poverty gap indicator is produced by the World Bank Development Research Group. It measures poverty using information from household per capita income/consumption. The poverty gap data is available for 115 countries worldwide and is updated semiannually in April and September.

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