Concepts of Poverty and the Poverty Line

Abstract. Various approaches adopted in developed economies to distinguishing between the poor and non‐poor—to setting a poverty line—are reviewed. These include the budget standard, food ratio, ‘official’, subjective and relative poverty line methods, as well as the analysis of indicators of deprivation. There has been significant progress in recent years in the degree of sophistication involved, and a movement away from approaches with a quasi‐absolute background. However, all the methods face formidable problems at conceptual and empirical levels, and no single approach is likely to dominate.