Which of the following is the current global measurement of the extreme poverty line?

Correct option is C

Correct Answer: (c) 2.15 - a day

Explanation:

• In September 2022, the World Bank updated the global extreme poverty line. The new line is set at $2.15 per person per day, based on 2017 Purchasing Power Parity (PPP) prices.
• This replaces the previous standard of $1.90 (which was based on 2011 PPP).
• This metric measures the percentage of the population living on less than this amount, often referred to as the "headcount ratio."

Information Booster

• Purchasing Power Parity (PPP): Used to compare standards of living between countries by adjusting for price level differences.

• Higher Poverty Lines: The World Bank also tracks lines for Lower Middle-Income Countries ($3.65) and Upper Middle-Income Countries ($6.85).

• SDG Goal 1: The first Sustainable Development Goal is to "End poverty in all its forms everywhere."

• Societal Poverty Line: A relative measure that increases as a country gets richer.

Additional Information

• (a) $ 1.90 - a day: This is the old extreme poverty line based on 2011 PPP, used between 2015 and 2022.​

• In India, poverty is typically measured in two main ways:
  • Income-Based Approach (Poverty Line Method): The income-based approach involves setting a specific income threshold, known as the poverty line, below which individuals or families are considered poor. This is calculated based on the minimum income needed to meet the basic requirements for food, shelter, and clothing.
  • Headcount Ratio (HCR) Method: The Headcount Ratio (HCR) method is one of the most widely used measures. It calculates the percentage of the population living below the poverty line. It is a simple way to estimate the extent of poverty in a country or region.