Browsing by Author "Syvälahti, Sara"

Ending poverty is a moral and ethical aim, and living without poverty is one of the human rights. To eradicate poverty, the reliable practice of measuring poverty is needed. Poverty measures are required to identify the poor people, overview the incidence of poverty and track progress of policies. This study examines the hybrid poverty line and asks how it differs from the conventional approach to measure extreme poverty globally. Additionally, this study reviews how the global poverty counts evolve with this novel poverty line. This thesis comprises a comprehensive review of the relevant literature. Measuring poverty is essentially based on how welfare is defined. In poverty analysis, consumption and income are used as indicators of welfare. The poor people are identified with the appropriate poverty line, the absolute or relative poverty line. These two approaches have very different conclusions about the economic welfare: relative incomes in a society do not matter for welfare at all or relative incomes are the only thing that matters. When the poor people are identified, a poverty index is needed to aggregate the overall incidence of poverty. The hybrid poverty line consists of the absolute poverty line expressing a lower bound of the poverty measure and the weakly relative poverty line as an upper bound giving a limit of the weight of relative deprivation rising with the mean consumption. The results say that the estimates of the global poverty rate show a slower pace of reduction compared with the conventional approach, likely due to a rising count of relative poverty worldwide. This study broadens our understanding how the chosen poverty line affects the incidence of poverty rates. This study emphasizes the importance of re-evaluating poverty measurement practices, particularly in the context of developing countries experiencing economic growth. As absolute poverty lines may lose meaning as a result of economic development, it is necessary to develop measures that account for the relative dimensions of poverty following the increasing standards of living.