Comparison of Key Demographic Determinants of Absolute and Relative Poverty: An Empirical Analysis

Abstract

Poverty comparison is the most important reason for measuring poverty; especially when two or more situations such as different poverty thresholds are likely to have different impacts on poverty measurements and outcomes. The main objective of this study is to estimate and compare the effects of key demographic determinants of absolute and relative poverty. The logit equations show gender, race, place of residence, and marital status to explain individual socioeconomic status, after adjusting for the various factors. Comparing the varying impacts of the key demographic factors when absolute and relative poverty thresholds are employed, each of the demographic factors has shown the same effect. However, each of the key demographic factors has a variable effect in explaining poverty when an absolute or relative poverty threshold was applied. Because the same demographic factors explain the likelihood of individuals living in absolute or relative poverty, it is important to consider the implication of the two different types of poverty when developing poverty reduction interventions.

Keywords: Poverty comparison, demographic determinants, absolute poverty, relative poverty, median income.