Poverty and inequalities

Poverty means lacking enough to meet basic needs; inequality means uneven distribution, which can rise even as poverty falls. Absolute poverty uses a fixed threshold (a poverty line); relative poverty compares with the typical living standard of the society. Worked example: in a population of 200 where 30 people live below the poverty line, the headcount ratio is 30/200 = 15%. But the headcount alone says nothing about how far below the line the poor are — that needs the poverty gap.