The World Bank definition follows the concept of absolute poverty. This approach is usually used to measure poverty in developing countries, where poverty is often a matter of subsistence. According to this concept, poverty is defined as follows: extreme poverty is living on less than 1.25 U.S. dollars a day (Purchasing Power Parity) and moderate poverty is living on less than two U.S. dollars a day. Developed countries normally report poverty rates based on relative poverty. Relative poverty is typically determined based on a certain percentage of a society’s median income. Every person living of an income underneath this poverty line is considered poor.
The U.S. Census Bureau follows a similar approach when calculating the poverty rate of the United States. According to this measure, 12.3 percent of the population lived in poverty in 2017. The child poverty rate in the United States was at 17.5 percent as of 2017, up from 16.2 percent in 2000. The poverty rate in the U.S. greatly varies across different ethnic groups. While only 8.7 percent of the white population lived below the poverty line in 2017, the poverty rates for Blacks and Hispanics were 21.2 and 18.3 percent respectively.
In other parts of the world the level of poverty is far more dramatic. In 2017, more than 803 million people worldwide suffered from hunger and malnutrition according to the United Nation’s Food and Agriculture Organization. While the situation is continuously improving in South and East Asia, Sub-Saharan Africa still suffers from extremely high poverty levels. In addition to the high prevalence of HIV, malnutrition and extreme poverty are the main reasons for the low life expectancy in Africa compared to other regions of the world.