Measurements and determinants of multifaceted poverty: Absolute, relative, and subjective poverty in Indonesia

Problems associated with the definition and measurements of “poverty” have been debated over decades. Poverty is a multifaceted phenomenon and different societies have different perceptions of “poverty”. Although he did not directly refer to the notion of “poverty”, Smith (1776) (in Sen, 1983) noted that the Greeks and Romans lived very comfortably though they had no linen; but in the present time, through the greater part of Europe, an average day laborer would be ashamed to appear in public without a linen shirt. This means that although a linen shirt had become the norm for European society in the 1770s, it was not the case in ancient Greek or Roman societies. The perception of the “necessaries”, and therefore that of “poverty”, is diversified and dynamic. It varies across countries with different socio-economic norms. It may also change over time even in the same society, with different states of development.