Poverty, Inequality and Social Exclusion
This domain tests definitions and measurement of poverty, the difference between poverty and inequality, and the processes that exclude groups from full participation in society.
Core concepts
- Absolute poverty is income or consumption below a fixed line needed for survival. Relative poverty is low income compared with the rest of society.
- Headcount ratio is the share of people below the poverty line; the poverty gap shows how far below the line they are.
- Multidimensional poverty captures overlapping deprivations in health, education and living standards.
- Inequality is distribution. The Gini coefficient and Lorenz curve measure it.
- Social exclusion means being shut out of services, decision-making, decent work or social respect because of group identity, location, disability or migration status.
Namibia's inequality has deep historical roots in colonial land dispossession, migrant labour, wage gaps and a dual economy of formal and informal work. Poverty has fallen since independence, but inequality remains severe.
Worked example
Country X has 30% of people below the poverty line but a small poverty gap; Country Y has 15% below the line but a large gap. A headcount-only policy in X might target many people lightly. In Y, fewer people need intensive transfers, but the poorest are much further from the line. The reasoning shows why the headcount and the gap answer different policy questions.
Traps that cost marks
Treating poverty as only low income; using Gini to measure absolute poverty; assuming averages describe the poor; confusing inequality of outcome with inequality of opportunity; treating social exclusion as identical to poverty.