Economists measure wealth and poverty in a variety of ways. The three most common measures are income, assets (accumulated wealth in the form of money, securities and real estate) and socioeconomic metrics.
Measures in the last category go beyond financial data. They also encompass access to health, quality food, infant mortality, basic sanitation and other aspects of human well-being.
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Income inequality is really the underlying issue in poverty, especially in developed nations. It refers to income differences between various groups of individuals and households in an economy.
It is often differences in wealth that make people feel rich or poor. In a developing country, a family with running water, treated sewage, decent food and clothing, and access to health care and education is quite privileged.
In developed countries like the United States, however, millions of people who have these things are considered poor. This happens because these things constitute the essence of these countries.
The most accurate definition of poverty would be the state of someone who does not have a usual or socially acceptable amount of money or material goods. The World Bank identifies areas of the world where significant portions of the population live on less than US$1 a day.
These are the poorest people in the poorest regions of the world. Places where food, shelter, medical care and other necessities are dangerously scarce. Poverty is most widespread in sub-Saharan Africa and South Asia.
More than 40% of the population lives on less than US$365 a year in these regions. Altogether, more than 1 billion people in the world are in this situation.
