Consider the following example. Two families have the same income, say US$3.00 per person per day. However, only one family has access to adequate water, sanitation, and electricity, whereas the other lives in an area lacking the necessary infrastructure for basic services, such as a power grid or water mains. Members of this second family will still consume water and use energy for lighting and cooking, but they may have to spend hours per week fetching water from a well, or pay higher prices to obtain lower quality water from a truck. For sanitation, they may use a private or communal latrine, without the convenience or hygiene benefits of a sewerage connection. And with no access to an electricity grid, the second family’s choice set for lighting and power options is severely reduced. Both households will spend some of their US$3.00 per person per day to meet their energy and water needs. Yet, because their choice sets, including the prices they face, are so different, the differences in their living standards arising from the access that the first family enjoys are not captured by a monetary measure of poverty alone. The first family clearly enjoys a higher standard of living than the second, but a welfare judgment that considers only their incomes will pronounce them equally well-off. This is an example of when public action—or lack thereof—can directly affect the well-being of households by expanding—or not—their choice sets in ways that incomes and prices fail to fully internalize. It is possible that, under a broader assessment of poverty, the second family might be considered poor or deprived, even though its daily income is above the international poverty line of US$1.90 per day. The point of this example is that monetary-based measures do not encompass all aspects of human well-being. Hence, it strongly suggests looking at poverty in terms of the ______? A) Relativity Poverty Index B) Economic Poverty Index C) Singularity Poverty Index D) Localization Poverty Index E) Multidimensional Poverty Index
Consider the following example. Two families have the same income, say US$3.00 per person per day. However, only one family has access to adequate water, sanitation, and electricity, whereas the other lives in an area lacking the necessary infrastructure for basic services, such as a power grid or water mains.
Members of this second family will still consume water and use energy for lighting and cooking, but they may have to spend hours per week fetching water from a well, or pay higher prices to obtain lower quality water from a truck. For sanitation, they may use a private or communal latrine, without the convenience or hygiene benefits of a sewerage connection.
And with no access to an electricity grid, the second family’s choice set for lighting and power options is severely reduced. Both households will spend some of their US$3.00 per person per day to meet their energy and water needs.
Yet, because their choice sets, including the prices they face, are so different, the differences in their living standards arising from the access that the first family enjoys are not captured by a monetary measure of poverty alone.
The first family clearly enjoys a higher standard of living than the second, but a welfare judgment that considers only their incomes will pronounce them equally well-off. This is an example of when public action—or lack thereof—can directly affect the well-being of households by expanding—or not—their choice sets in ways that incomes and prices fail to fully internalize.
It is possible that, under a broader assessment of poverty, the second family might be considered poor or deprived, even though its daily income is above the international poverty line of US$1.90 per day.
The point of this example is that monetary-based measures do not encompass all aspects of human well-being. Hence, it strongly suggests looking at poverty in terms of the ______?
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