Texto para Discussão, Instituto de Pesquisa Econômica Aplicada (IPEA) 1381
The objective of this text is to compare various approaches to defining poverty lines. The Cost of Basic Needs approach has been the most widely used method in Brazil and Latin America, there are various alternatives. In addition to the Cost of Basic Needs and Food Energy Intake methods, the text also discusses multidimensional poverty lines, not widely used in Brazil but quite popular in the rest of Latin America. Administrative poverty lines, such as half of a minimum wage or a dollar a day in purchasing power parity terms, are also discussed. Finally, the text also discusses relative and subjective poverty lines, widely used in the European OECD countries. The text's main conclusion is that although some approaches are better than others, this depends on the context. There is no perfect and criticism-proof method for defining who is and who is not poor.