Poverty Gap

The poverty gap is the average shortfall of the total population from the poverty line, and it addresses the intensity of poverty in a country. As a helpful indicator for policymakers and donors, the poverty gap indicates the difference between the income or consumption of the poor and the poverty line by taking a value as a percentage of the poverty line. It is calculated by adding all the shortfalls of the poor population and dividing the resulting total by the population. In this measurement, the nonpoor are naturally considered to have zero shortfall, as they are already above the poverty line.

The poverty gap is particularly important both to make an assessment of how far the standard of living of the poor population is from ...