Poverty Threshold

A poverty threshold determines a measurable cut-off point that separates the poor from the nonpoor. It usually takes the form of a poverty line that defines a specific amount of necessary income for the household or the individual.

Poverty thresholds are the most widely used poverty measures in public policy, be it on a national or an international level. The $1-a-day poverty line introduced by the World Bank in 1990 is undoubtedly the most visible. Because the concept of a poverty threshold is so characteristic for how poverty is measured, let alone perceived, it is important to understand the historical context of its emergence. This also allows one to comprehend the consequences that the fixation on a poverty threshold has had. Poverty thresholds were revolutionary in ...