When examining the causes of poverty, it’s useful to distinguish types of poverty:
1. Types of poverty
Poverty has many dimensions, monetary and non-monetary, absolute and relative, material and psychological. One can distinguish between three types of poverty:
Poverty “type A”
- Low income or consumption levels
- Low average calorie intake levels
- High infant mortality rates
- Low life expectancy rates
- High illiteracy rates
- High unemployment
- Widespread diseases, especially curable ones
- Famine or high risk of famine
- High rates of economic migration.
Poverty “type B”
Apart from these absolute monetary and non-monetary kinds of poverty, there is also relative poverty: people compare themselves to others, mostly others who are relatively close by and better off. This inequality of income or consumption can result in the following psychological symptoms of poverty:
- Feelings of loss of dignity
- Low self-esteem
- Feelings of relative powerlessness
- Feelings of lack of participation in culture and politics
- Feelings of discrimination and resentment.
As you can read in this post, poverty type A is often linked to poverty type B, i.e. the more unequal a society, the more people suffer from absolute poverty.
Poverty “type C”
A third kind of poverty is vulnerability, the actual or perceived risk of future poverty. This vulnerability can result in the following psychological symptoms of poverty:
- Fear, stress
- Feelings of insecurity
- Irrational precaution measures
- Family planning decisions
2. Measuring poverty
These are three kinds of poverty. Not all of them can be easily measured. Some perhaps cannot be measured at all. Even the apparently easy ones, such as infant mortality rates or income levels, can and do pose problems, such as the availability of data (poor countries often do not have the institutional resources to generate high quality statistics), international comparability of data, definitions of data etc.
However, it is important to measure the levels of poverty and their evolution as good as we can. Only if we have data can we judge the effectiveness of specific programs to alleviate specific symptoms of poverty.
Some traditional measures of some symptoms of poverty “type A” above are:
- Gross Domestic Product (GDP, or total annual country income) per capita or per citizen
- Calorie intake levels (an average adult male has to eat food representing approximately 2000-2500 calories per day in order to sustain the human body)
- Level of income (e.g. “1 $ a day” level, which is the World Bank definition of extreme poverty level; moderate poverty is less than $2 a day; these levels are of course expressed in purchasing power parity)
- Number of years in education
- Literacy levels
Poverty “type B” above is traditionally measured using the Gini coefficient (see here) although most symptoms of this kind of poverty, as well as “type C” poverty, are intangible.
The difficulties of aggregating the different available measures, together with the difficulties of measuring other indicators, result in the impossibility to establish a single, binary poverty indicator, “are you poor or not”, yes or no type of indicator. One may be poor according to one indicator but not according to another. On the other hand, you may not be poor according to any indicator but the fact that you skim the borders of many indicators may result, on aggregate, in poverty nevertheless.
As a result, many scientists and politicians use a simplified rule to establish poverty, for example the “1 $ a day” rule, of some other kind of poverty level expressed quantitatively.
It is also important to measures the time frame of poverty, i.e. incidental or chronic poverty. This difference should be taken into account when devising policies. Moreover, the depth of poverty should be measured. This depth is the distance to the poverty line. Just below the poverty line or way below makes a lot of difference.
3. Causes of poverty
When you know what kind of poverty people suffer, and when you have measured their poverty, you can start to look at the causes of their poverty. This will be important once you start working on the solutions.
The causes can be of different kinds:
- Accidental causes, such as drought, disease, birth defects, handicaps etc.
- Historical causes, such as colonialism
- Economic causes, such as energy prices, food prices etc.
- National political causes, such as bad governance, corruption, absence of the rule of law, rights violations, war, oppression, misguided agricultural policies, lack of investment in economic infrastructure and education etc.
- International political causes, such as trade policy, protectionism etc.
- Social causes, such as racism, sexism, discrimination, ethnic division
- Individual causes, irresponsible behavior, self-destructive behavior
- Demographic causes such as overpopulation or a high percentage of people who are too young or too old to be economically active
- Geographic causes such as access to fertile land, fresh water, minerals, energy, and other natural resources
- Environmental causes, such as climate change, soil erosion and desertification etc.
- Poverty traps
Continue reading here.