Author: haroonkhan

It is the percentage of people who are below the poverty line. This Index does not measure the depth of poverty, however. When the sum of all poverty gaps is multiplied by the headcount index, the Poverty Gap Index is obtained.

This is used to measure the distance between the poverty line and the mean income of the poor. The formula used for this purpose is:   where y stands for the subsistence minimum, x for the income of the i-th observed household and N for the total number of households observed.

It is the ratio of expenditure on food to the lump sum of general expenses of a family. In 1992, the Russian government set the limit at 68 per cent for households, and 83 per cent for pensioners. Households or pensioners spending more than this sum on food were treated as poor. Using this yardstick, the…

It compares the average per capita income of the lowest 10 per cent with the average per capita income of the highest 10 per cent of the population. The greater the difference between them, the greater the gap between the rich and the poor. Similar comparisons are also made for the lowest 20 per cent…

This Index measures the extent to which the distribution of income, or consumption expenditure, among individuals/households deviates from a perfectly equal distribution. A Lorenz curve plots the cumulative percentages of total income received against the cumulative percentages of recipients, starting with the poorest. The Gini Index measures the area between the Lorenz curve and a…

In Romania, three different measures are used, namely Subsistence Minimum (SM), Decent Minimum of Life (DM), and Minimum determined by the Ministry of Labour and Social Protection (MM). Subsistence Minimum, in the Romanian context, is said to refer to ‘absolute’ poverty, to draw the poverty line (but here absolute is not the synonym of destitution). The DM is the equivalent of…

In Georgia, the Subsistence Minimum is calculated on the basis of a Consumer Basket, which is not the same as Food Basket. This includes, apart from the essential foodstuffs (thus excluding cigarettes, though they are a part of regular expenditure in most homes), other services and utilities. Since these utilities are shared by all members of the family, and…

In Hungary, the concept of Subsistence Minimum is further divided into two categories: Social Minimum and Survival Minimum. The Social Minimum is the income within which the fulfilment of basic necessities allows such a consumption of goods and services for which there is a mass social demand, albeit at a modest but socially acceptable level and quality. The Survival…

A more refined method is the computation of the Subsistence Minimum—a concept of the old Soviet methodology. This is also calculated in different ways. Some determine it in terms of the Food Basket. For each member of the household, an appropriate number of calories are allocated depending on the person’s age and sex, and then the cost for…

In these countries, a different technique is used to draw the poverty line. It is drawn in relation to Average Income. For example, in Russia, all the people who receive less than the average income are regarded as living below the poverty line. But these people are grouped into three categories depending on the distance between the…