European Union : Using Subnational Data for the Operationalization of the Cohesion Policy

Poverty can be defined in various ways, capturing different facets of deprivation. Traditionally, poverty has been understood as insufficient command over economic resources. This is typically measured in monetary terms and is expressed in one of two ways: absolute poverty, and relative poverty. Absolute poverty is assessed by comparing household income or consumption to a fixed poverty threshold, which represents the minimum cost needed to meet basic needs. Relative poverty, in contrast, measures deprivation by comparing individuals' incomes or levels of consumption to a minimum living standard within their society. This is habitually expressed as a fraction of a central measure, such as the mean or median income. Absolute poverty measures are deployed more commonly in low-income countries to assess basic subsistence, while relative measures are used more frequently in high-income countries to capture aspects of social inclusion. Both approaches are one-dimensional, as they focus primarily on the economic aspects of poverty