Head count ratio

The poverty rate indicates the percentage of persons in the total population of an economy, living on an income below the poverty line.

Mainly two different methods are used to define this poverty line:

• It is based on the average income of the population value. From this starting means you take a certain percentage (eg 50 % of average total income). Each of the earned less counts as "poor". This method is used to calculate the so-called relative poverty.
• It is based on a specific basket, the cost per month calculated the poverty line form. The proportion of the population earns less than the value of the basket, is considered poor. This method determines the absolute poverty. Sometimes two different shopping carts are used, according to which the group of the poor is divided into normal poverty and extreme poverty, whichever shopping cart may be purchased from monthly income.

There are also more complex calculation forms, in addition to the income and other indicators such as include the housing situation.