Human beings need a certain minimum consumption of food and non-food items to survive. However, the perception regarding what constitutes poverty varies over time and across countries. Nevertheless, there is need for a measure of poverty. Only then, it will be possible to evaluate how the economy is performing in terms of providing a certain minimum standard of living to all its citizens. Measurement of Poverty has, therefore, important policy implications.
According to the World Bank, to compute a poverty measure, three ingredients are needed:
