Understanding Poverty: Sociological and Economic Perspectives

Ask an economist what poverty means and you will likely hear about income, rupees per day, and lines drawn on a chart. Ask a sociologist the same question and you will hear about isolation, dignity, poor housing, and exclusion from everyday social life. Both are talking about the same human suffering, yet they describe it in strikingly different languages. Understanding why these two disciplines diverge-and how the philosopher-economist Amartya Sen built a bridge between them-is essential to grasping what poverty actually is and how to fight it.

Two disciplines, two definitions 🔗

Poverty seems like an obvious idea until you try to define it precisely. The moment you do, you discover that the definition depends heavily on who is asking the question. Economists and sociologists approach poverty from different starting points, and these starting points shape everything from how we measure deprivation to how governments design welfare schemes.

The economic view tends to be narrow and quantifiable. The sociological view tends to be broad and relational. Neither is “wrong,” but each captures only part of a much larger picture. To understand the full scope of poverty, we need to examine both.

The economic perspective: poverty as a shortage of resources 🔗

Economists typically define poverty in terms of a person’s economic position-specifically, their income or consumption level. The logic is straightforward: a person is poor if they cannot afford the goods and services needed for a minimum standard of living. This is the basis of the familiar poverty line, a threshold below which a household is officially counted as poor.

The poverty line represents the minimum income or consumption level required to meet basic needs such as food, shelter, and clothing. In India, this threshold has been calculated and recalculated by a series of expert committees. The early approach, going back to Dadabhai Naoroji’s nineteenth-century estimates, fixed the line around the cost of a subsistence diet. For decades afterward, poverty estimation rested heavily on a minimum calorie intake.

How India draws the line 🔗

The methodology has evolved significantly. The Tendulkar Committee, which submitted its report in 2009, marked a major shift by moving away from a purely calorie-based measure toward a broader basket including spending on education, health, clothing, and footwear. Under this methodology, the rural poverty line for 2011-12 was estimated at around ₹816 per capita per month and the urban line at about ₹1,000.

The Rangarajan Committee, constituted in 2012, revised these figures upward. It fixed the line at a monthly per capita expenditure of ₹1,407 in urban areas and ₹972 in rural areas for the same year, which produced higher poverty counts. Notably, the Rangarajan report was never formally accepted by the government, leaving the Tendulkar methodology as the last officially endorsed poverty line.

Absolute versus relative poverty 🔗

Within the economic framework, two important distinctions emerge. Absolute poverty is measured against a fixed benchmark-the minimal resources required for physical survival, regardless of where or when a person lives. Relative poverty, by contrast, measures deprivation in relation to the surrounding society. A family might not be starving, yet still be considered poor if their resources fall far below the norm for their community, preventing them from participating fully in social life.

This distinction matters because it begins to expose the limits of pure income measurement. Two people with identical incomes can experience very different levels of deprivation depending on their society, their health, and their access to public services. This is precisely where the sociological perspective enters.

The sociological perspective: poverty as multidimensional deprivation 🔗

Sociologists view poverty not as a single number but as a multidimensional condition that affects many aspects of human well-being at once. From this angle, poverty is about more than money-it is about social isolation, poor housing, ill health, lack of education, and being shut out of the relationships and activities that most people in a society take for granted.

A central concept here is social exclusion. According to a widely used definition, social exclusion is a complex, multidimensional process involving the lack of resources, rights, goods, and services, and the inability to participate in normal relationships and activities available to most people in a society-whether in economic, social, cultural, or political life. Poverty, in this reading, is not just a state of having too little. It is a process that actively pushes people to the margins.

Why income alone misses the point 🔗

Sociologists point out that focusing solely on income overlooks the texture of poverty as it is actually lived. Consider a single mother working two jobs who still cannot find time or money to join community life, or a teenager who cannot afford to go out with friends. Both may be technically above some income threshold, yet both suffer the psychological and social effects of exclusion from their peer groups.

There is also an important difference between poverty and social exclusion that sociologists are careful to draw. Where poverty often describes a distributional shortfall, social exclusion implies that there are processes and institutional actors actively responsible for excluding people, and it usually involves inequality or relative deprivation. In other words, exclusion has agents and mechanisms behind it; it does not just happen.

Intersecting disadvantages 🔗

The sociological lens is especially good at revealing how disadvantages stack on top of one another. A woman from an ethnic or caste minority living in a rural area may face overlapping obstacles in employment, access to social services, and political representation. Each disadvantage compounds the others, and these intersecting factors can lock families into cycles of poverty that persist across generations. This is something a single income figure can never capture.

Amartya Sen’s capability approach: bridging the divide 🔗

If the economic view feels too narrow and the sociological view feels hard to measure, the work of Amartya Sen offers a powerful way to connect them. Sen, an Indian economist and philosopher who won the Nobel Memorial Prize in Economic Sciences, articulated the capability approach in the 1980s as an alternative to standard welfare economics.

Sen’s central insight is deceptively simple. He argued that poverty should be understood not as a lack of income, but as a deprivation of the basic capabilities needed to live a life one has reason to value. Income matters, but only as a means to an end. What truly counts is what a person is actually able to be and do.

Functionings and capabilities 🔗

Two terms anchor this framework. Functionings are the “beings and doings” that people value-being well-nourished, being educated, being healthy, taking part in community life. Capabilities are the real freedoms a person has to achieve those functionings. Sen challenged economists to measure valuable human functionings rather than simply counting income or possessions.

This explains why the capability approach treats poverty as capability failure rather than a mere failure to meet basic needs. A person who cannot pursue an education, access healthcare, or participate in political life is genuinely poor in a meaningful sense, regardless of whether their income happens to cross an arbitrary threshold. The focus shifts from the resources people have to the freedoms those resources allow them to enjoy.

Why this matters for measurement 🔗

Sen also highlighted that individuals differ in their ability to convert income into well-being. A person with a disability may need more income to achieve the same level of mobility as someone else. A region with poor public health infrastructure makes good health harder to attain even for those with money. By emphasising an individual’s ability to generate the minimum necessary income and convert it into a decent life, the capability approach accounts for the differences between people that income measures ignore.

This is why Sen’s framework has been so influential. It takes the precision and policy-orientation that economists value and combines it with the multidimensional, human-centred concerns of sociologists. Development, in this view, becomes the expansion of human capabilities rather than just the growth of GDP.

From theory to policy: the Multidimensional Poverty Index 🔗

Sen’s ideas did not remain confined to academic journals. They directly inspired one of the most important tools in modern poverty measurement: the Multidimensional Poverty Index (MPI). Built on the capability approach, the MPI measures deprivations directly rather than relying solely on income.

In India, the National MPI is produced by NITI Aayog in collaboration with the United Nations Development Programme and the Oxford Poverty and Human Development Initiative. It measures simultaneous deprivations across three equally weighted dimensions-health, education, and standard of living-captured through twelve indicators aligned with the Sustainable Development Goals. These indicators include nutrition, years of schooling, sanitation, drinking water, electricity, and cooking fuel.

According to NITI Aayog, the proportion of people living in multidimensional poverty fell substantially between 2015-16 and 2019-21, with improvements in nutrition, schooling, sanitation, and cooking fuel playing a major role. While some experts have questioned the pace of this reported decline, the MPI itself represents a clear practical move beyond income-based thinking toward Sen’s capability-centred vision.

Bringing the perspectives together 🔗

So how should we think about poverty? The economic perspective gives us measurable thresholds and a clear basis for distributing welfare benefits, but it risks reducing a complex human condition to a single number. The sociological perspective captures the lived reality of exclusion, stigma, and intersecting disadvantage, but it can be harder to quantify for policy.

Sen’s capability approach reconciles the two. It insists that the real question is not “how much money does a person have?” but “what is this person actually free to be and do?” By framing poverty as capability deprivation, it honours the economist’s demand for rigour and the sociologist’s demand for depth. The growing use of multidimensional measures in India and around the world suggests that this broader, more humane outlook is steadily becoming the standard.

What do you think? If income and consumption cannot fully capture what it means to be poor, which capabilities do you believe are most essential for a dignified life in today’s society? And should governments distribute welfare based on a single poverty line, or on a person’s deprivation across multiple dimensions?

References

1. https://byjus.com/free-ias-prep/how-are-poor-people-identified/
2. https://en.wikipedia.org/wiki/Suresh_Tendulkar
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4. https://www.poverty.ac.uk/definitions-poverty/social-exclusion
5. https://www.ebsco.com/research-starters/political-science/poverty-and-social-exclusion
6. https://gsdrc.org/topic-guides/social-exclusion/dynamics/the-conceptual-links-between-exclusion-and-poverty/
7. https://easysociology.com/sociology-of-inequalities/poverty-an-introduction/
8. https://iep.utm.edu/sen-cap/
9. https://ophi.org.uk/research/amartya-sen-and-ophi
10. https://www.researchgate.net/publication/327381829_POVERTY_AS_LACK_OF_CAPABILITIES_AN_ANALYSIS_OF_THE_DEFINITION_OF_POVERTY_OF_AMARTYA_SEN
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12. https://www.undp.org/india/national-multidimensional-poverty-index-progress-review-2023