Which one of the following is considered as correct for Poverty Gap?

Correct option is C

The correct answer is Difference between poverty line and actual income level of all those living below that line.

1. The poverty gap refers to the difference between the poverty line and the actual income of individuals who fall below that line. It measures the extent to which individuals’ income is below the established poverty line.
2. The poverty gap can also be understood as the total income shortfall of the poor, providing a more accurate reflection of the depth of poverty compared to simply measuring the percentage of people below the poverty line.

Information Booster

1. Concept of Poverty Line:
1.1. The poverty line is the minimum level of income deemed necessary to meet the basic needs of life, including food, shelter, and clothing.
1.2. The poverty gap quantifies how much more income would be required to bring those below the poverty line up to the threshold.
1.3. It is used to measure the depth of poverty, whereas the poverty rate typically reflects the breadth of poverty (i.e., the percentage of the population living below the poverty line).
1.4. The poverty gap ratio is calculated by summing the income shortfall of all people living in poverty and dividing it by the poverty line.

2. Poverty Gap vs. Income Distribution:
2.1. The poverty gap focuses specifically on how far people are from the poverty line in terms of income, whereas the income distribution looks at the overall distribution of wealth across society.
2.2. It highlights the severity of poverty, showing not only how many people are poor but also how poor they are.

3. Role in Policy and Aid:
3.1. Policymakers use the poverty gap to determine the amount of resources or aid needed to reduce poverty.
3.2. It helps in targeting interventions and allocating resources effectively to the most impoverished populations.


Additional Information

Gap between Rich and Poor: (1) The gap between the rich and poor is a broader socio-economic issue but is not the definition of the poverty gap. The poverty gap specifically refers to the income shortfall of those living below the poverty line.

Gap between developed and developing nations: (2) This option refers to global economic disparity rather than the specific income shortfall experienced by individuals living in poverty within a country. The poverty gap is a national or local measure, not a global one.

Gap in infrastructure facilities between developed nations: (4) This option pertains to infrastructure disparities and does not relate to poverty measurement. The poverty gap does not involve comparing infrastructure but focuses on income levels relative to the poverty line.